One of the first questions home buyers ask is "how much can I borrow?" The answer depends on your income, expenses, existing debts, and the lender's criteria. Here's a practical guide to help you understand your borrowing power in 2026.
The Quick Answer: Borrowing Power by Salary
As a general rule, most lenders will let you borrow around 5-6 times your annual income. However, this varies significantly based on your circumstances. Here's a guide based on current lending criteria:
Estimated Borrowing Power (Single Applicant, No Dependents)
| Annual Salary | Estimated Borrowing Power | Monthly Repayment* |
|---|---|---|
| $80,000 | $450,000 - $520,000 | $2,850 - $3,290 |
| $100,000 | $580,000 - $670,000 | $3,670 - $4,240 |
| $120,000 | $710,000 - $820,000 | $4,490 - $5,190 |
| $150,000 | $900,000 - $1,040,000 | $5,695 - $6,580 |
| $200,000 | $1,200,000 - $1,380,000 | $7,590 - $8,730 |
*Based on 6.5% interest rate, 30-year loan term, principal & interest. Actual amounts vary by lender and circumstances.
Couples: Combined Income Borrowing Power
If you're buying with a partner, your combined income significantly increases borrowing power:
Estimated Borrowing Power (Couple, No Dependents)
| Combined Income | Estimated Borrowing Power |
|---|---|
| $150,000 | $850,000 - $980,000 |
| $180,000 | $1,020,000 - $1,180,000 |
| $200,000 | $1,140,000 - $1,320,000 |
| $250,000 | $1,420,000 - $1,640,000 |
What Affects Your Borrowing Power?
Factors That Increase Borrowing Power
- Higher income - Salary, bonuses, overtime, rental income
- Stable employment - Permanent full-time roles preferred
- Clean credit history - No defaults or late payments
- Low existing debts - Fewer credit cards and personal loans
- Larger deposit - Shows savings discipline
- Buying with a partner - Combined income helps significantly
Factors That Reduce Borrowing Power
- Dependents - Each child reduces capacity by $150-250/month in calculations
- Existing debts - Car loans, HECS/HELP, credit cards, BNPL
- High living expenses - Lenders assess your spending habits
- Self-employment - Usually need 2 years of tax returns
- Casual/contract work - Less certainty for lenders
- Credit card limits - Even unused limits count against you
The Credit Card Trap
Many buyers don't realise that credit card limits reduce borrowing power - even if you pay them off monthly.
Impact of Credit Cards on Borrowing Power
Lenders assume you could max out your cards, so they reduce your borrowing power accordingly:
- $10,000 credit limit = roughly $50,000 less borrowing power
- $20,000 credit limit = roughly $100,000 less borrowing power
Tip: Cancel unused credit cards and reduce limits before applying for a home loan.
How HECS/HELP Affects Borrowing
Your HECS/HELP debt reduces your take-home pay, which affects borrowing power. The impact depends on your debt level and income:
- $30,000 HECS debt on $100k salary = approximately $40,000 less borrowing power
- $50,000 HECS debt on $100k salary = approximately $65,000 less borrowing power
Some lenders are more favourable toward HECS debt than others - a broker can help find the right match.
How to Maximise Your Borrowing Power
- Reduce credit card limits - Cancel cards you don't need
- Pay off personal loans - Clear small debts before applying
- Reduce living expenses - Lenders look at 3-6 months of bank statements
- Cancel BNPL services - Afterpay, Zip etc. can affect your application
- Declare all income - Bonuses, overtime, rental income all help
- Choose the right lender - Different lenders have different criteria
Different Lenders, Different Results
Your borrowing power can vary by $100,000+ between lenders. Some are stricter on expenses, while others are more generous with certain income types.
For example:
- Some lenders count 80% of bonuses, others count 100%
- Some lenders shade rental income at 70%, others at 80%
- Some are more flexible with self-employed applicants
This is where a mortgage broker adds value - we know which lenders will give you the best result for your situation.
Get Your Actual Borrowing Power
The figures above are estimates only. Your actual borrowing power depends on your complete financial picture. To find out exactly how much you can borrow:
- Gather your payslips and bank statements
- List your debts and credit card limits
- Book a consultation with us
We'll assess your situation across 50+ lenders and tell you exactly what you can borrow - and how to maximise it if needed.
Find Out Your Borrowing Power
Get a personalised assessment from JMD Mortgages. We'll tell you exactly how much you can borrow and which lenders suit your situation.
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