How much can you actually borrow?

SH

Written by ShaheeraPrincipal Mortgage & Finance Broker. 20+ years in lending, including senior lending roles at ANZ. Credit Representative CA56706 under Australian Credit Licence 389328.

Last updated 28 July 2026

"How much can I borrow?" is usually the first question, and the honest answer is: it depends. Two lenders looking at the exact same person can land tens of thousands of dollars apart. Understanding why puts you in control, and often means borrowing more than the first number you're quoted.

As a very rough starting point, many borrowers can access somewhere around five to six times their gross annual income. But that's a sighting shot, not a promise. The real figure comes down to a handful of things every lender weighs up.

What lenders actually look at

• Your income, and its type.Salary is read differently from overtime, bonuses, commissions, casual work or self-employed income. Some lenders count 100% of overtime; others count half. This alone can move your number a long way.
• Your living expenses.Lenders use the greater of your declared expenses or a benchmark figure for your household. Your recent bank statements matter here.
• Existing debts and limits.Car loans, personal loans, HECS/HELP, buy-now-pay-later, and even the limit on a credit card you never use all reduce what you can borrow.
• Your deposit and the loan-to-value ratio.A bigger deposit lowers your LVR, which can open up sharper rates and avoid lenders mortgage insurance, though capacity is mostly driven by income and expenses, not deposit size. First home buyers can often get in with just 5% and no LMI under the First Home Guarantee.
• Dependants and household size.More people to support means higher assessed living costs, which trims borrowing power.

The buffer that surprises everyone

Here's the part most people don't expect: lenders don't assess you at the actual interest rate. They add a buffer on top, commonly around three percentage points, and check you could still afford the repayments if rates climbed that far. So a loan advertised at, say, 6% might be assessed at around 9%. It's a safety margin, and it's the single biggest reason your approved amount comes in lower than a basic online calculator suggests.

How to increase your borrowing power

1. Lower or close credit card limits. Lenders count the full limit as a liability, not your balance. Reducing a limit you don't need can lift your capacity quickly.
2. Clear or consolidate small debts. A car loan or personal loan repayment weighs heavily. Paying one off before you apply frees up serviceability.
3. Trim discretionary spending for a few months. Lenders look at recent statements, a tidy few months before applying helps your assessed expenses.
4. Choose the right lender for your income. If you rely on overtime, bonuses or self-employed income, the lender you pick matters enormously. This is where a broker earns their keep.
5. Apply jointly where it makes sense. A second income can lift capacity, though a co-applicant's debts come along too.

Get a real number, not a guess

Online calculators are a useful sighting shot, our borrowing power calculator will give you a ballpark in a minute. But the figure that counts is the one a lender will actually approve, and that takes matching your specific situation to the right lender's policy.