Property · Serviceability 2026 · Updated July 2026
Borrowing power in 2026: what lenders will actually give you
Lenders don't lend against your salary — they lend against your monthly surplus, stress-tested at your interest rate plus 3%. A $120,000 household with typical expenses clears about $3,590/month of surplus, which services roughly a $442,000 loan at a 9.1% assessment rate. Our calculator runs this exact method with your numbers.
Calculate your borrowing power → — Assessment rate, DTI and surplus — shown, not hidden
How the serviceability calculation works
- Start with net income: gross household income minus tax and Medicare (FY 2026–27 rates).
- Subtract declared living expenses — benchmarked against HEM, so understating doesn't help.
- Subtract existing repayments, including ~3.8%/month of every credit card limit, used or not.
- The remaining surplus is annuitised at the assessment rate (your rate +3%, per APRA APG 223) over the loan term — that's your borrowing power.
Why your number differs between banks
The framework is standard but the inputs aren't: lenders differ on how much overtime, bonus, commission and rental income they count (often 80% haircuts), how they treat HELP debts and dependants, and where their DTI ceiling sits. A broker's value is largely arbitrage across those policies — differences of $50,000–$150,000 on the same applicant are routine.
Every result on our calculator states the assessment rate and DTI it used, because a borrowing estimate that hides its assumptions is a marketing number, not a plan.
Common questions
Why is the buffer 3%?
APRA set the serviceability buffer at 3 percentage points in late 2021 and has held it since — it protects against rate rises over a loan's early years. Our calculator lets you vary it, since a future APRA change moves everyone's borrowing power at a stroke.
What debt-to-income ratio is too high?
Above 6× gross income triggers scrutiny at most lenders and hard caps at some. The calculator prints your DTI so you know which side of that line your plan sits on.
How can I increase borrowing power quickly?
In rough order of impact: cancel unused credit cards (limits count as debt), clear small loans and BNPL, trim provable expenses for 3–6 months, extend the loan term, and consider whether a small HELP balance is worth clearing. Income takes longer to move than commitments do.