Your borrowing capacity in Australia depends on your income, existing debts, living expenses, number of dependants and the lender’s assessment rate. In 2026 most lenders assess loans at a buffer of 3% above the loan rate, meaning a 6.5% variable rate loan is assessed at 9.5% serviceability.
Borrowing Capacity Estimates by Income (2026)
| Gross Annual Income | Estimated Borrowing Capacity | Notes |
|---|---|---|
| $80,000 | $400,000 to $480,000 | Single income, minimal debts |
| $100,000 | $500,000 to $600,000 | Single income, minimal debts |
| $150,000 | $750,000 to $900,000 | Single income, minimal debts |
| $120,000 combined | $600,000 to $720,000 | Couple, one dependant |
| $180,000 combined | $900,000 to $1,100,000 | Couple, minimal debts |
| $250,000 combined | $1,200,000 to $1,500,000 | Couple, minimal debts |
These are estimates only. Actual borrowing capacity varies significantly between lenders and depends on your full financial position.
What Reduces Your Borrowing Capacity?
- Existing car loans, personal loans or credit card limits (even if unused)
- HECS or HELP debt (counted as a monthly obligation)
- Number of dependants (each reduces capacity by approximately $20,000 to $40,000)
- High living expenses in your bank statements
- Self-employment income assessed at a lower rate by some lenders
- Investment property loans already held
How to Increase Your Borrowing Capacity
- Pay off and close unused credit cards before applying
- Reduce personal loan balances
- Add a co-borrower (partner or guarantor)
- Use a lender with more generous assessment criteria
- Provide two years of consistent income history
Frequently Asked Questions
How does a bank calculate my borrowing capacity?
Lenders calculate your net income after tax, then subtract your monthly living expenses and existing debt repayments. The remaining surplus is used to calculate how much you can service at the buffer rate (typically 9 to 9.5% in 2026).
Does HECS debt reduce borrowing capacity?
Yes. HECS repayments are treated as a monthly commitment and reduce your assessable surplus income. A $50,000 HECS balance can reduce borrowing capacity by $30,000 to $50,000 depending on the lender.
Can I borrow more with a guarantor?
Yes. A family guarantee from a parent who owns property can allow you to borrow up to 100% of the purchase price plus costs, avoiding LMI entirely. The guarantor’s property is used as security for the portion above 80% LVR.
Where can I access a borrowing power calculator?
The Collings portal includes a borrowing power calculator and off-market property access calibrated to your borrowing capacity. Sign up free at collings.com.au/portal.
Find Properties Within Your Budget
Whether you’re buying your first investment property, building a portfolio, or exploring SMSF property investment, the Collings Property Platform gives you access to off-market opportunities, portfolio tracking, investment tools, and property insights powered by GeeVee AI. Join free today and start building your property future. collings.com.au/portal
Find your next property with Collings
Track suburbs, get matched to on-market and off-market listings, and manage your whole property search in one place. Access the Collings property portal.
