How Much Can I Borrow for a Home Loan?
It is the first question almost everyone asks me, and the honest answer is: it depends, but less than you would hope and more than you might fear.
Your borrowing power is not one fixed number. It is a range that moves with your income, your debts, your expenses, the assessment rate, and crucially, which lender you walk into. Here is how it actually works in 2026, and the levers that move it.
The short answer
As a rough starting guide, many borrowers land somewhere around five to six times their gross household income. So a couple earning $150,000 between them might see a ballpark in the high-$700,000s to high-$800,000s. Treat that as a sighting shot, not a number to bank on.
Why so loose? Because that figure is before the real machinery runs: your debts, your living costs, the stress-test rate, and the specific lender all push the number up or down, often by a lot.
What lenders actually test
Lenders do not just multiply your income. They run a serviceability calculation: your income, minus your living expenses, minus the repayments on your existing debts, minus the repayments on the new loan. What is left is your surplus, and it has to be comfortably positive.
The catch is the stress test. Regulators require lenders to assess you not at the actual rate, but at your rate plus a 3 percentage point buffer. With variable rates around 6.5%, that means you are assessed as if you were paying about 9.5%. That single rule is the biggest reason borrowing power has felt tight.
The levers that move your number
These are the things that quietly drag your borrowing power down. The good news is most of them are things you can do something about.
Illustrative relative impact on borrowing power. Your actual figures depend on your situation and the lender.
What changed in 2026
Two things are worth knowing this year. First, from February 2026 regulators introduced a debt-to-income limit: lenders now have to keep loans at six times income or higher to a small share of their new lending. If you are borrowing right at the top of your capacity, expect more scrutiny and fewer lenders willing to stretch.
Second, the treatment of HECS and HELP debt is easing and now varies a lot by lender. Some will not count it at all if you are close to paying it off, and at least one major has piloted a smaller buffer for those near the end of their student debt. If you carry a HELP balance, the lender you choose can move your number meaningfully.
Six ways to lift your borrowing power
1. Cut or close credit card limits. Lenders assess the limit, not what you owe. Trimming limits you do not need can add tens of thousands in a day.
2. Clear or consolidate small debts. Car loans, personal loans and buy-now-pay-later all eat into serviceability. Paying down the small ones first often frees up the most.
3. Tidy up your spending. Lenders look at your real living expenses in the months before you apply. A clean, sensible few months helps.
4. Choose the right lender. This is the big one. Different lenders treat HECS, overtime, bonuses, casual income and rent very differently. Matching you to the right one is the single biggest lever I pull.
5. Use the loan term sensibly. A longer term lowers the assessed repayment and can lift capacity, at the cost of more interest over time. A lever to weigh, not a default.
6. Count all your income properly. Overtime, allowances, bonuses, rental and side income can count, but only if presented the way each lender wants to see it.
The honest part
A borrowing number is an estimate, not a promise. It changes with rates, lender policy and your own circumstances. Variable rates in particular move with the lender, so do not assume today's repayment is locked unless you have specifically fixed it.
Online calculators are a guide only. They cannot see how a particular lender will treat your income and debts, which is exactly where the real difference lives. The only way to know your number is a proper assessment across lenders. This is general information, not financial or credit advice.
Already investing? Know your real position first
If you own property, your equity and existing debts drive what you can borrow next. Compass is the free tracker I built to show your equity, LVR and net worth in one place, so you walk into the conversation knowing your numbers.
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A free chat, no obligation. I will run your situation across lenders and tell you honestly what you can borrow and how to lift it.
Book my free callMatty Teague, Mortgage Broker, Powered by Flint. Credit Representative 573962. Flint Group Pty Ltd ACL 488313.
FAQs
What is the rough rule for how much I can borrow?+
A common starting guide is around five to six times your gross household income, but it is a range, not a promise. Your real number depends on your debts, living expenses, the assessment rate, and which lender you use. Two lenders can land more than $100,000 apart on the same application.
Does HECS or HELP debt reduce how much I can borrow?+
It can, because the compulsory repayment is counted as an ongoing commitment. The good news is treatment now varies by lender. Some, for example, will not count it if you are within about a year of paying it off, and policies are easing. The right lender choice can noticeably change your number if you have a HELP balance.
Why do different lenders offer me different amounts?+
Every lender uses its own serviceability calculator with different assumptions on living expenses, how it treats other income, HECS, overtime, bonuses and rental income. That is the single biggest reason borrowing power varies, and where a broker who knows the calculators earns their keep.
Does a credit card I never use affect my borrowing power?+
Yes. Lenders assess the credit limit, not the balance. An unused $20,000 card is treated as if it could be fully drawn, which can cut your borrowing power by tens of thousands. Reducing or closing limits you do not need is one of the fastest ways to lift it.
Will a longer loan term let me borrow more?+
Usually a little, because it lowers the assessed monthly repayment. The trade-off is more interest paid over the life of the loan. It is a lever, not a free win, and worth weighing rather than defaulting to.
How accurate are online borrowing calculators?+
They are a rough guide only. They cannot see how a specific lender treats your income, debts and expenses. The only way to know your real number is a proper assessment across lenders, which is free through a broker.
I compare 40+ lenders to find not just a good rate, but the lender that lets you borrow what you actually need. First home buyers and investors across Australia.
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