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    How to Use the Affordability Calculator (and What the Numbers Mean)

    20 May 20256 min read

    By Leo Forman

    Founder & Editor · 20 May 2025

    Two tools answer “what can we afford?”: the guided steps on the home page, and the borrowing capacity calculator. What each input does and how to read the result. Updated October 2026.

    The home page: what your savings and income reach

    How much have you saved? The first result is the price your savings reach once every upfront cost is paid: the deposit plus stamp duty, conveyancing, inspection and registry fees. That is lower than five times your savings, because all of those come out of the same money by settlement day.

    Your income before tax (and a second income, if you are buying with someone). This is optional. With it, the page also works out what a bank would lend, using the APRA serviceability test: your rate plus a 3 percentage point buffer.

    The binding constraint. Whichever limit is lower sets your price. If it is your deposit, saving more raises the ceiling directly. If it is the bank, more savings barely move it; less debt or a second income on the application does.

    How much can you save each month? Used only to estimate how long until you reach the target.

    The borrowing capacity calculator: the bank's view

    The borrowing capacity calculator takes more detail and returns the largest loan you could service:

    • Income, before tax, for you and a partner. Rental income counts at 80%, as most lenders count it.
    • Debts: other loan repayments, car loan, HECS-HELP.
    • Credit card limits: counted at 3.8% of the limit per month, whatever the balance.
    • Interest rate: defaults to 6.2%. You are assessed at that rate plus 3 points, with a 5.5% minimum.
    • Living costs: a simplified version of the Household Expenditure Measure (HEM) lenders use as a floor.
    What debts cost you: on a $100,000 income at 6.2%, the calculator puts the maximum loan at about $483,000. A $10,000 credit card limit, unused, cuts it to about $437,000. $10,000 a year of other loan repayments cuts it to about $381,000.

    Common mistakes

    • Entering after-tax income. Both tools need income before tax; they work out the tax themselves at 2026–27 rates.
    • Counting bonuses and overtime in full. Lenders often discount variable income or want two years of history. Leave it out to see the floor.
    • Forgetting card limits and HECS. A card limit counts even with a zero balance. A HECS/HELP debt counts through its compulsory repayment, which depends on your income, not on how much you owe.
    • Treating the maximum as the target. The maximum leaves no room for rate rises or a change in income. The repayments calculator shows what a smaller loan costs each month.

    Next

    With a price range, the map shows which suburbs have median prices inside it. A formal pre-approval comes from a lender; a licensed mortgage broker, usually paid by the lender, can compare lenders on its panel first.

    Start on the home page →

    General Advice Warning

    The information on this site is general in nature and does not consider your personal circumstances, financial situation, or needs. Before acting on any information, you should consider its appropriateness having regard to your own situation and seek professional advice from a licensed financial adviser, mortgage broker, accountant, or solicitor.