How Much Can I Borrow? A Guide to Home Loan Borrowing Power
One of the first questions most buyers ask is how much can I borrow for a mortgage? Your borrowing power determines what price range you can realistically shop in, how confident you feel making offers, and whether your repayments remain comfortable long-term.
In this guide, we’ll explain:
How lenders calculate borrowing power
What impacts how much you can borrow
The difference between borrowing power and buying power
Why calculators are a starting point — not the final answer
We’ll also show you how to use two tools that can give you clarity in minutes.
Borrowing Power vs Buying Power
These two terms are often used interchangeably, but they measure different things.
Borrowing Power
Borrowing power answers the question: How much can I borrow for a mortgage or home loan?
It’s based on your income, expenses, debts, and current lending rules.
👉 Use the Borrowing Power Calculator to get an estimate.
Buying Power
Buying power answers a different question: What property price could I afford based on my deposit and borrowing capacity?
It factors in:
Your deposit
Stamp duty
Purchase costs
Lenders Mortgage Insurance (if applicable)
👉 Use the Property Buying Power Calculator to get an estimate.
Tip: Many buyers are surprised to learn their borrowing power is strong, but their buying power is limited by deposit size or upfront costs.
How Much Can I Borrow for a Mortgage?
When lenders assess how much you can borrow for a mortgage, they are really asking one question:
Can you comfortably afford the loan — now and if interest rates increase?
To answer this, every lender applies a serviceability assessment.
Your Income
Lenders look at stable, ongoing income, including:
PAYG salary or wages
Self-employed income (often averaged over two years)
Rental income (usually discounted)
Bonuses, commissions, and allowances (may be shaded)
Different lenders treat income differently, which can significantly change your borrowing limit.
Your Living Expenses
Banks assess your household spending, including:
Day-to-day living costs
Subscriptions
Insurance
Transport and childcare
Number of dependants
Even if your income is strong, higher living expenses can reduce how much you can borrow for a home loan.
Existing Debts
All liabilities are factored in, such as:
Credit card limits (not just balances)
HECS/HELP debt
Car loans or novated leases
Personal loans
Buy now, pay later accounts
Credit cards are one of the most common reasons borrowing power is lower than expected.
Interest Rate Buffers
Lenders don’t assess your loan at today’s interest rate.
Instead, they apply a buffer to ensure you can handle future rate rises. This has a major impact on borrowing capacity and explains why borrowing limits can feel tighter than they were in the past.
How Much Can I Borrow for a Home Loan With a Deposit?
Your deposit affects more than just whether you can buy — it also influences:
Interest rate options
Whether Lenders Mortgage Insurance (LMI) applies
Which lenders and products you can access
Common deposit scenarios:
20% deposit – often avoids LMI
10–15% deposit – LMI usually applies but still very achievable
5% deposit – possible with select lenders or schemes (subject to eligibility)
To see what your deposit translates to in terms of property price, use the Property Buying Power Calculator.
Mortgage Calculators vs Reality
Online calculators are helpful — but they are a guide only.
Borrowing power can change based on:
How a lender treats your income type
Expense assumptions used by the bank
Credit card limits and liabilities
Loan structure choices
Policy differences between lenders
Two borrowers with similar incomes can receive very different outcomes depending on the lender used.
This is why calculators should be your starting point, not your final decision-maker.
What Can Reduce Your Borrowing Power?
If your borrowing capacity seems lower than expected, common reasons include:
High credit card limits
Car loans or personal loans
HECS/HELP debt
Higher household expenses
Multiple dependants
Recent job changes or probation
Inconsistent self-employed income
If you’re planning to buy in the next 3–12 months, many of these factors can be improved with the right strategy.
How a Mortgage Broker Can Help You Borrow Smarter
A Mortgage Broker doesn’t just calculate numbers — they help you choose the right lender and structure based on your goals.
At My Finance Consultants, we:
Compare options across 40+ lenders
Match your situation to lender policy (PAYG, self-employed, investor)
Optimise loan structure to improve serviceability
Help you understand both borrowing power and buying power
Provide clarity before you start making offers
The goal isn’t just to borrow more — it’s to borrow confidently and sustainably.
If you want a personalised assessment based on current lender policy, a quick chat can help confirm your position and next steps.