This calculator is designed to give you an estimate of how much money you can borrow from a lender. Note that the borrowing power is calculated on a custom model which can differ from lender to lender. The purpose of this calculator is to merely give an indication of what a lender could offer you, based on some of your basic incomes and financial commitments. You'll only know how much you can borrow for certain when you apply and receive conditional approval for a maximum borrowing amount on a loan.
- It does not take into account any possible fees i.e. up-front fees or ongoing fees.
- Interest rate does not change over the loan term.
- Interest is calculated by compounding on the same repayment frequency selected. In practice, interest compounding frequency may not be the same as repayment frequency.
- It is assumed that a year consists of 26 fortnights or 52 weeks (364 days).
- No rounding is done throughout calculation whereas repayments are rounded to the nearer cent in practice.
- Buffer: Many lenders apply a buffer (e.g. 2%) to the interest rate to calculate borrowing power. Repayments shown are at your entered rate.
- The borrowing power is calculated at the greater of: (Interest rate + 2%) or a floor rate of 7.5%.
- The greater of your Living expenses input or a default HEM (Household Expenditure Measure) amount is used.
