How much can I borrow for a home loan in Australia?

It is the first number every buyer wants, and the honest answer is that there is no single figure, because it depends on your full financial picture and on which lender you use. What helps is understanding how lenders actually work it out, because once you see the moving parts you can see where your real borrowing power comes from and how to improve it.

What lenders are really working out

At its core, a lender is working out your capacity to repay. It starts with your income, subtracts tax, your living expenses and your existing debt commitments, and looks at the surplus left over. That surplus is what is available to service a new loan, and it sets the ceiling on what you can borrow. The bigger your genuine surplus, the more you can generally borrow.

The serviceability buffer

Here is the single biggest reason people are offered less than they expect. APRA requires lenders to assess your repayments at an interest rate around 3 percentage points above your actual rate, a stress test called the serviceability buffer. So even if you could comfortably afford the real repayment, you are assessed as though rates were much higher, which lowers the maximum you can borrow. It is not negotiable and every regulated lender applies it.

What counts as your income

Lenders generally start from your gross income, but not all income is treated equally. Steady salary is straightforward, while variable income such as overtime, bonuses and commission is often shaded, meaning only part of it is counted. Self employed income is assessed from your tax returns and business financials. How fully your income is counted can make a real difference to your number.

What reduces your borrowing power

Your commitments pull the number down, and some in ways people do not expect.

• Existing loans such as car and personal loans reduce your surplus directly.
• A credit card is generally assessed on its limit, not its balance, so even an unused card counts.
• HECS or HELP repayments and buy now pay later commitments are counted.
• Your declared living expenses, checked against a benchmark, also feed in.

The new debt-to-income cap

From 1 February 2026 there is an extra guardrail. APRA limits banks so that no more than a set share of their new lending can go to borrowers whose total debt is above six times their gross income. It is a cap on the bank, not a target for you, but for higher borrowers it can be the binding limit. Non-bank lenders are not subject to this particular cap, which is one reason a broker can sometimes find more room.

Why two lenders give different numbers

Borrowing capacity is not a single national figure. Each lender uses its own expense benchmark, its own rules for shading variable income, and its own treatment of things like HECS and credit cards. The result is that the same person can be offered noticeably different amounts by different lenders, which is exactly why comparing matters.

How to increase your borrowing power

There are legitimate ways to lift your number within the rules: reduce or close unused credit card limits, clear small debts before applying, trim discretionary spending in the months before you apply, and choose a lender whose policies suit your situation. None of these change your income, but together they can meaningfully change what you are offered.

How a broker pins down your real number

Because the figure depends on your full picture and varies by lender, a broker is well placed to work out your real borrowing power and which lender stretches furthest for you. A broker can run your scenario, explain the levers, and arrange a pre-approval that confirms it, usually at no cost to you because the lender pays the broker on settlement.