borrowing capacity calculator
Before applying for a loan, it is helpful to understand how much you may be able to borrow. Our Borrowing Capacity Calculator gives you an estimate based on your income, expenses, debts, and financial commitments.
ESTIMATE YOUR BORROWING CAPACITY
Get an estimated idea of how much you may be able to borrow based on your income, expenses, debts, and financial commitments.
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This calculator provides estimates only. Borrowing capacity may vary based on lender criteria, income type, liabilities, credit history, expenses, and overall financial position.
Frequently asked questions
What is borrowing capacity?
Borrowing capacity, also known as borrowing power, refers to the amount of money a lender may be willing to lend you based on your financial situation. It helps determine how much you could potentially borrow for a home loan, investment property, or other finance needs.
how is borrowing capacity calculated?
Borrowing capacity is determined by reviewing your income (individual or joint), living expenses, existing financial commitments, interest rates, and loan term. Lenders use these factors to estimate how much you may be able to borrow while ensuring your repayments remain manageable and suited to your financial situation.
how to increase borrowing capacity?
There are several ways to improve your borrowing capacity and potentially increase the amount a lender may be willing to lend you:
1. Reduce existing debts
Paying down credit cards, personal loans, or car loans can improve your financial position and reduce your monthly commitments.
2. Lower your living expenses
Cutting unnecessary spending may help demonstrate stronger financial management and improve serviceability.
3. Increase your income
A higher salary, additional work, rental income, or other consistent income sources can increase your borrowing power.
4. Save a larger deposit
A bigger deposit may reduce the loan amount needed and improve your loan application profile.
5. Maintain a good credit history
Making repayments on time and managing debts responsibly can strengthen your credit profile.
6. Reduce credit card limits
Even unused credit card limits can affect borrowing capacity, as lenders consider them a potential liability.
7. Choose a longer loan term
Extending the loan term may reduce monthly repayments, which can improve borrowing capacity in some cases.
8. Apply with a co-borrower
Combining incomes with a partner or family member may increase the total amount you can borrow.
Using a Borrowing Capacity Calculator can help give you an estimate of how changes to your finances may affect your borrowing power.
Can my borrowing capacity change over time?
Yes. Changes to your income, expenses, debts, interest rates, or employment situation can affect how much you may be able to borrow.