Borrowing power, explained
How much can I borrow? What decides it, and why every calculator disagrees
You want to know what you can spend before you fall for a house. The straight answer: it depends on the lender as much as on you. Each lender counts your pay its own way, takes off your debts and living costs, then tests whether you could still pay at a rate 3 percentage points above the one you'd be charged. That's why three calculators can give three numbers on the same facts, and why finding the lender whose rules suit your income is how you find your real number.
+3 points added to your interest rate when a bank tests whether you can repay [1]
6× income total debts at six times income or more: APRA limits each bank to 20% of its new lending there [2]
80% of overtime counted for most jobs at Westpac Group, NAB, Bankwest, Macquarie and ANZ [3]
The borrowing power guide
Twenty-nine questions people ask before they ask a bank, answered from APRA's rules and each lender's own credit policy.
How much can I borrow for a home loan?
How much you can borrow for a home loan comes down to three things: the income a lender will count, what it takes off for your debts and living costs, and whether what's left would still cover the repayments at a test rate at least 3 percentage points above the real one [1]. Your deposit then sets a second limit, on the price of the property (part 22).
There's no single right number, because lenders don't share one set of rules. Money Brain doesn't print a guess of its own on this page. The borrowing capacity calculator gives you a starting figure from your own numbers; the real figure comes from running your actual pay, debts and household through the lenders whose rules suit them.
How do banks work out how much you can borrow?
Banks work out how much you can borrow with a serviceability test, a check that you could keep up the repayments. It runs in four steps.
1. The income it will count: your base pay, plus whatever share of overtime, allowances, bonuses, rent or business income its rules allow.
2. What comes off: tax, the repayment on every debt, a repayment on each card's full limit, and the living costs of a household like yours.
3. The test rate: the new loan's repayment is worked out at least 3 percentage points above the rate you'd actually pay [1].
4. The loan against your income: APRA limits how much of each bank's new lending can go to people whose total debts are six or more times their income [2].
If something is still left after the test rate, the loan passes. The biggest loan that still passes is your borrowing power at that lender.
Why do borrowing calculators give different answers?
Borrowing calculators give different answers because each one is a simplified version of a different lender's rules, and most leave things out. One bank's tool shows that bank's view of your overtime, your rent, your living costs and your cards. Another bank's tool applies its own rules to the same facts and gets a different number. Neither is wrong; they're answering for different lenders.
| What's counted | Why two lenders can differ |
|---|---|
| Overtime | Several count 80% for most jobs, but each wants a different history first: 3 months at some, an average of 180 days at another (part 5) [3] |
| Allowances and shift penalties | Counted in full at some lenders, at 80% at others, or capped at a share of base pay (part 6) [3] |
| Casual pay | From 6 months in the job to 6 months plus 12 months in the same industry (part 7) [3] |
| Salary packaging | Added back in full, added back untaxed, capped, or not counted without an employer letter (part 11) [3] |
| Credit cards | A repayment on the full limit, not the balance, and lenders set that repayment differently (part 14) |
| Living costs | The higher of what you declare or the lender's own benchmark for your household (part 16) |
| Rent | Counted at less than the full rent, at a share each lender sets (part 13) |
A short online form also can't ask about every kind of income, every debt and every dependant, so it fills the gaps with assumptions. The fewer questions it asks, the more its number is a guess. These are the places lenders part ways:
What this means for you: when two calculators disagree, the gap usually sits in one of these rows. Find the row that's yours and you've found which lender to look at first.
What do lenders count as income?
Lenders count your income by kind, and each kind has its own rule.
Base salary or wages: usually in full, from your payslips.
Overtime, allowances, bonuses and commission: often counted at less than their full value, and often only with a history behind them. Lenders differ most here (parts 5 and 6).
Casual pay: counted once you've been in the job long enough for that lender (part 7).
Rent from an investment property: usually counted at less than the full rent, to allow for empty weeks and costs (part 13).
Self-employed income: usually from your recent tax returns, with some lenders accepting other evidence (part 12).
Government payments: some count, some don't, and some only in part.
Whatever the kind, the lender wants it on paper: a payslip, an income statement or a tax return that shows it.
Does overtime count when you borrow?
Overtime counts at most lenders, but often not all of it. For most jobs, Westpac Group, NAB, Bankwest, Macquarie and ANZ count 80% of your overtime, because it can stop, and each wants a history first [3]:
What this means for you: on $20,000 of overtime, a lender that counts 80% counts $16,000. If you've just started a job, the history rule can matter more than the share: apply before you meet it and the overtime may count for less, or be left out.
| Lender | Overtime counted | History they want |
|---|---|---|
| Westpac Group | 80% | 3 months |
| NAB | 80% | An average of the last 180 days; not annualised under 6 months |
| Bankwest | 80% | 3 months this year, or last year's income document |
| Macquarie | 80%, if regular, ongoing and shown on paper | 3 months this year |
| ANZ | 80% | 3 months (full or part time), 6 months (casual) |
| Suncorp | Not stated in the policy we hold | 6 months continuous |
Some lenders count all of the overtime for certain essential-service jobs, nurses among them. See nurse home loans.
Do allowances and shift penalties count?
Allowances and shift penalties usually count, but each lender sets its own share and history rule for them.
NAB: counts recurring allowances, shift allowances included, in full from two payslips in a row; one that varies by more than 20% is treated as overtime. Shift penalties count in full, as base pay, for permanent staff when they're part of your regular hours, from the lower of two payslips [3].
ANZ: counts ongoing allowances in full, but not higher-duties pay or one-off payments [3].
Macquarie: counts shift and other allowances in full where they're a condition of your job and standard in your industry, from 3 months of pay this year [3].
Westpac Group: counts allowances at 80% for most jobs [3].
Suncorp: counts allowances at 80% for most jobs after 6 months, and not cost reimbursements such as uniform or meal money [3].
ING: counts allowances up to 25% of your base pay, and a car allowance at 80%. Costs that go with an allowance must be in your expenses [3].
Bring payslips that show each allowance and penalty on its own line. A payslip that lumps them together is harder for a lender to count.
Can I get a home loan on casual income?
Yes. Casual pay can count, in full at some lenders, once you've been in the job long enough for that lender's rule.
Westpac Group: counts casual pay in full after 6 months continuous with the same employer or agency, spread over 52 weeks [3].
Suncorp: counts it in full after 6 months continuous, or 12 months in a similar role [3].
NAB: averages the last 180 days, penalty rates included, with overtime split out at 80% [3].
Bankwest: wants 6 months with your current employer, and uses the lower of this year's pay annualised or last year's. Seasonal work isn't accepted [3].
Macquarie: wants 6 months in the job, or the past 6 months in the same field [3].
ING: wants 6 months in your current job, and spreads the pay over 52 weeks [3].
AMP: wants 6 months with the employer and 12 months in the same industry and role; under 6 months isn't accepted [3].
ANZ: wants 6 months employed, with gaps of under 28 days allowed. With LMI, a casual can't be the only or main earner on the loan [3].
If you're a few weeks short of a lender's mark, waiting can change the answer more than anything else you do.
Can I get a home loan with a new job or on probation?
You can get a home loan with a new job at some lenders, once you've started and been paid. Westpac will lend without mortgage insurance once you have started the job and received your first pay. A loan with mortgage insurance needs 3 months in the job, or less than that with 12 months in the same occupation and no gap of more than 2 months between jobs [3].
A new job or a pay rise is shown with your employer's letter, email or contract giving the new base pay, plus one payslip at the new rate [3]. Overtime and allowances in a new job usually wait for the lender's history period (part 5).
Can I borrow on part-time income?
Yes. Permanent part-time pay counts as base pay. Westpac uses the lowest base rate and hours on your payslips, unless there's a reason they vary. One-off unpaid leave can be counted back in if you confirm you're back to your normal hours [3].
Can I get a home loan on parental leave?
Yes, at some lenders. Westpac can use your return-to-work pay, base pay only, with a letter from your employer giving your return date, your hours and your pay. Every child counts as a dependant, including one not yet born [3].
If your first repayment falls before you go back, you'll need savings that cover the gap, on top of the money for the purchase. With mortgage insurance in that case, Westpac won't lend for an investment. Other long leave, such as a career break, isn't accepted [3].
Does salary packaging affect how much I can borrow?
Salary packaging, also called salary sacrifice, can lift what you borrow, because lenders add packaged pay back to your income. How they add it back differs [3]:
What this means for you: tax-free packaged pay leaves more of each dollar to repay a loan with, so a lender that counts it as tax-free income can lend more on the same pay. Bring your packaging statement along with your payslips.
| Lender | How packaging is counted |
|---|---|
| Westpac Group | Added back in full, where it's voluntary and could be cancelled and taken as pay |
| ANZ | Packaging that isn't taxed is added back untaxed, on top of your taxable pay |
| NAB | For staff of employers exempt from fringe benefits tax: added back as tax-free income, up to $970 a month. Above that, taxed at your rate unless your employer confirms in writing that it pays the tax |
| AMP | Counted only with an employer letter confirming it can be taken as cash |
Hospital and health workers have extra packaging rules at some lenders; see nurse home loans.
How much can I borrow if I'm self-employed?
If you're self-employed, how much you can borrow usually rests on your recent tax returns, and some lenders accept other evidence. The same test then applies: what's counted, what comes off, and the test rate.
Which returns a lender uses, and what it adds back to your profit, differ from lender to lender. They're set out in full on self-employed home loans.
Does rental income count towards borrowing power?
Rental income counts towards borrowing power, but usually at less than the full rent, to allow for empty weeks and the costs of owning the property. The share is each lender's own.
For a property you're about to buy, the lender counts part of the expected rent and tests every existing loan at its test rate (part 24). See using equity to buy an investment property.
How do credit cards and other debts affect borrowing power?
Credit cards and other debts lower your borrowing power because their repayments come off what's left to repay a new loan.
Credit and store cards: usually a repayment on the full limit, used or not, even on a card you clear each month.
Car and personal loans: the repayment comes off what's left.
Buy now pay later: counted as a debt like the others.
Other home loans: counted at the test rate, not the rate you pay (part 17).
HECS-HELP: the compulsory repayment comes off (part 15).
Closing a card you don't need, or cutting its limit, is one of the few changes that can lift the number before you apply.
Does HECS affect how much I can borrow?
Yes. HECS-HELP lowers how much you can borrow, because the compulsory repayment comes off the income a lender counts, even though it isn't a repayment you choose.
Paying it off early can lift the number, but it also uses savings that might otherwise go into your deposit. Which matters more depends on whether your income or your deposit is the limit (part 22).
What living expenses do lenders use?
Lenders use the higher of two figures for living expenses: what you tell them you spend, or their own benchmark for a household like yours. So spending less than the benchmark doesn't lift the number, but spending more than it lowers it.
Each dependant lowers what's left, and childcare comes off as a cost of its own. That's one reason two people on the same pay, one single and one with children, get different answers.
Your bank statements show the lender what you really spend, so the figure you declare should match them.
What interest rate do banks test you at?
Banks test you at an interest rate at least 3 percentage points above the rate you'd actually pay. That's the serviceability buffer APRA expects banks to use [1]. A loan at 6% is tested at 9% or more.
The buffer is there so a rise in rates doesn't leave you unable to pay. It's also why your borrowing power is lower than the loan today's repayment alone could cover.
Is there a limit on borrowing compared with your income?
Yes, in a way. APRA limits each bank to 20% of its new lending going to people whose total debts are six or more times their income, counted separately for home buyers and investors [2].
What this means for you: it isn't a cap on you. A loan at six times your income or more can still be approved, but each bank can only write so many of them, so it's one more reason lenders can answer differently at that level.
What salary do I need for a $500,000 loan?
There's no single salary a loan of that size needs, because the same salary supports different loans at different lenders. Your debts, your household, how your pay is made up and the rate you're tested at all move the answer.
The borrowing capacity calculator works it from your own figures; a lender's assessment gives the real one.
How much can I borrow on $100,000 a year?
How much you can borrow on that salary depends on what else is in your picture. Two people on the same pay can get very different answers: one with no debts and all base pay, the other with a car loan, two children and much of the pay in overtime.
What this means for you: the salary is the starting point, not the answer. The quickest way to a real figure is your payslips, your debts and your card limits, run through the lenders whose rules suit them.
How much can we borrow as a couple?
As a couple, a lender counts both incomes and both sets of debts and card limits, and assumes living costs for your whole household. A second income usually lifts the number, but a partner's debts come with it.
Some rules turn on who earns most. At ANZ, with LMI, a casual can't be the only or main earner on the loan [3].
Does my deposit affect how much I can borrow?
Your deposit and your income set two different limits. Your income sets how much a lender will lend you; your deposit sets how much it will lend against the property, through the LVR, the loan as a share of the property's price. Whichever limit is lower decides what you can buy.
| Way in | Deposit | LMI | Who it's for |
|---|---|---|---|
| Pay LMI | Less than 20% | You pay it | Anyone a lender will take above 80% of the price |
| 5% Deposit Scheme | 5% | None; the government guarantees the lender instead | First home buyers. No income caps; price caps by area [5] |
| Help to Buy | At least 2% | — | The government puts in up to 30% of an existing home's price, or 40% of a new one's, and holds that share, so you borrow less. Income caps apply. It can't be combined with the 5% Deposit Scheme [5][6] |
| Family guarantee | Smaller than you'd otherwise need | Set by the lender and the size of the guarantee | A parent puts up part of their home's equity. The person who signs takes on a real commitment |
| Professional LMI waiver | Varies by lender | None, where the lender waives it | Some professions, at some lenders |
If your income is strong but your deposit is small, the answer is usually lenders mortgage insurance (LMI), a government scheme or a family guarantee, not a bigger loan. LMI covers the lender, not you, when you borrow more than 80% of the price, yet you pay for it. On one insurer's published card, a first home buyer borrowing 90% on a $540,000 loan would pay about $11,178 [4]. That's an illustration, not a quote.
What this means for you: if the deposit is your limit, more income won't fix it; if income is your limit, a bigger deposit helps only by shrinking the loan. See LMI waivers, the 5% Deposit Scheme, Help to Buy and guarantor home loans.
How much can I borrow against my house?
How much you can borrow against your house depends on the same two limits: what the lender will lend against the home's value, and whether your income passes the same test as any other loan. Owning the home outright helps the first limit, not the second.
If what you owe plus the new loan comes to more than 80% of the home's value, LMI usually applies. See using equity to buy an investment property.
Is borrowing for an investment property assessed differently?
Yes. For an investment property, the lender adds part of the expected rent to your income, usually less than the full rent, and counts every existing loan at its test rate. APRA's debt-to-income limit is counted separately for investors [2].
Which lender suits you can change completely between your first home and your first investment. The order you buy in, and which lender holds which loan, decide whether you can keep going.
How can I increase my borrowing power?
You can increase your borrowing power by changing the things a lender counts, before you apply.
Cut card limits: close cards you don't use, or lower their limits (part 14).
Clear small debts: a car or personal loan repayment comes off what's left.
Meet the history rule: if you're a few weeks short of a lender's time-in-job rule for overtime or casual pay, waiting can count more of your pay (parts 5 and 7).
Pick the lender that counts your pay: overtime, allowances and packaging are where lenders differ most (parts 5, 6 and 11).
Get your paperwork in order: payslips that show each part of your pay on its own line, and a packaging statement if you package.
Check which limit is yours: if the price, not your income, is the limit, the ways in part 22 matter more.
How do I know how much I can actually borrow?
You know how much you can actually borrow once a lender has assessed your real figures. A calculator gives a starting point. A pre-approval, a lender's conditional yes before you find the property, gives a figure you can shop with.
Money Brain runs your figures through the lenders whose rules suit your income before anything goes to one, so you can see which lender counts your pay best.
What to have ready
Your last two payslips, showing overtime, allowances and penalties on their own lines
Last year's income statement, or your last two tax returns if you're self-employed
A statement for every loan and card, showing each card's limit
Recent bank statements, showing what you spend
Your salary packaging statement, if you package
An employer letter, if you're new, on leave or packaging non-cash benefits
The full document list is on How it works.
What does a broker cost you?
How a broker is paid, and the rule Money Brain holds against it, is set out in full on its own page: what a mortgage broker costs.
Your first move
You've read the rules. Now there's one question left: which lender counts the most of your pay, at the price you want? That depends on how you're paid, what you owe and who depends on you, and it's what Money Brain works out before anything goes to a lender.
When you're ready, the closing section below is the simplest way to start.
Want the real number, not a guess?
Tell me your income and how it's paid, your debts and card limits, and who depends on you. I'll run it through the lenders whose rules suit your pay and show you how each would assess it.
You'll hear back within the hour in business hours, and by 9am the next business day after hours.
Borrowing capacity questions
It depends on the income a lender counts, what it takes off for debts and living costs, and whether you could still repay at a rate at least 3 percentage points higher. Different lenders get different answers on the same facts, so the real figure comes from an assessment of your actual numbers.
Sources
- 1
APRA, Strengthening residential mortgage lending assessments (6 October 2021): serviceability buffer of at least 3 percentage points; held at 3 points in APRA's release of 28 May 2026. Re-read 29 September 2026.
- 2
APRA, debt-to-income limit from 1 February 2026: up to 20% of new lending at debt of six times income or more, separately for owner-occupier and investor lending (release of 27 November 2025). Re-read 29 September 2026.
- 3
Lender credit policies on overtime, allowances, shift penalties, salary packaging, casual income, new employment, part-time and parental leave: ANZ, Westpac Group, NAB, Bankwest, Suncorp, Macquarie, ING, AMP. Read 30 September 2026 (each lender's policy last updated between 22 and 29 September 2026).
- 4
LMI premium: one insurer's published rate card, first home buyer rates. Confirmed current 21 October 2026.
- 5
- 6
Updated 2 October 2026