What is my borrowing capacity when the loan is not a home loan? The serviceability logic does not change — income after haircuts, minus expenses at the floor, minus commitments, tested at a rate above the one you will pay. What changes is the term, the rate and what counts as a commitment. This article runs the same household from our home loan walk-through — $9,200 a month of assessed income, $4,330 a month of surplus after their floor expenses, car repayment and card charges — through three other doors: a personal loan, a car loan, and an investment property. One surplus, three very different answers.

Personal loan borrowing power: the same surplus, a much smaller loan

A personal loan borrowing power calculator works on harsher settings than a mortgage calculator, for a structural reason: the loan is unsecured and short. Take a $40,000 personal loan over 5 years at 9.95%. The repayment is $848.90 a month — $50,933.88 repaid in total, of which $10,933.88 is interest. Read in the other direction: if this household pointed their entire $4,330 surplus at unsecured borrowing at those settings, the arithmetic supports about $204,029.21 — against $550,400.12 of home loan on the same surplus. The gap is not a penalty for the loan being personal; it is the 5-year term and the near-double rate doing exactly what the annuity factor says they do.

The traffic runs both ways, too. Personal loan borrowing power taken today is home loan borrowing power spent tomorrow: that $848.90 repayment sits in the commitments line of any later mortgage assessment, where it is worth $107,906.14 of home loan capacity. This is the sense in which small loans are expensive in a way their interest rate never shows.

How much can I borrow: car loan

Car finance is secured on the vehicle and priced between the two: a $35,000 car loan over 7 years at 7.50% costs $536.84 a month ($45,094.53 all-in, $10,094.53 of it interest). That repayment is precisely the kind this household already carries — their existing $520-a-month car commitment is what the home loan test charges them for. Add a second car loan and the home loan answer falls by $68,239.40: the surplus drops to $3,793.16 a month and the maximum home loan with it. To calculate borrowing capacity honestly for a car purchase, the question is never just “can I service the car loan?” — it is “what does this repayment do to everything I plan to borrow next?”

How much can I borrow for an investment property?

The investment case adds a second income and a second assessed debt. Say the same household buys an investment property with a $450,000 loan at 6.75%, renting at $2,100 a month. The rent is shaded to 80% — $1,680.00 a month counts, allowing for vacancy and costs. The investment loan itself enters their commitments not at its real repayment ($2,918.69 a month) but at the assessed repayment with a 2.50% buffer, 9.25%: $3,702.04 a month. Run the sum: assessed income $9,200 + $1,680.00 = $10,880, minus $3,900 of floor expenses, $520 of car repayment, $450 of card charges and $3,702.04 of assessed investment repayment leaves a surplus of $2,307.96 a month — enough, at the same 9.25% test, to support a further $280,543.28 of borrowing. Note the double caution built into that result: the income is shaded on the way in and the debt is inflated on the way out. Lenders are not being inconsistent; they are pricing the two ways an investment can disappoint. A third caution often follows: the property’s running costs — insurance, maintenance, council or body-corporate charges — are frequently netted against the rent or added to living expenses as well, so the $1,680.00 counted here is, if anything, the generous version of the income line.

The three dials, side by side

The pattern the table exposes: the shorter and less secured the loan, the more of your monthly surplus each borrowed dollar consumes — which is why capacity figures shrink so violently as you move right, even though nothing about the household has changed. Structures that bend the pattern bend it honestly only one way: a balloon or residual payment at the end of a car loan lowers the monthly figure the test sees, but the debt does not vanish — it concentrates into one final payment that a future assessment will meet again.

The order to apply in

Because every loan reprices the next, sequence is a financial decision. If this household takes the car loan first, their home loan capacity falls by $68,239.40 before a home lender sees them. If they secure the home loan first, the car lender then assesses them with a $3,388.91-a-month mortgage repayment already in the commitments line — the car loan still fits their remaining surplus, but the margin for error is thinner and the car lender knows it. Neither order is universally right; keeping total commitments survivable if income drops is. What is never right is assessing each loan as if the others did not exist — that is the one method guaranteed to overstate your capacity, and it is the method most quick online estimates quietly use. Tax treatment, where it differs by loan purpose and country, sits outside the serviceability sum entirely: lenders test repayments, not deductions.

What $1,000 a month of surplus buys, three ways

The cleanest way to feel the dials is to hold the surplus constant. One thousand dollars a month, at this article’s three settings, supports $127,113.19 of home loan (tested at 8.75% over 30 years), $65,196.38 of car finance (7.50% over 7 years), or $47,119.91 of personal loan (9.95% over 5 years). Same money, same household, a threefold difference in what it can carry. Two forces do the damage, in order: the term (30 years of payments absorb far more principal than 5), and then the rate (a higher rate means more of each payment is interest, less is principal). This is also why moving a balance from a personal loan structure into a mortgage structure — where a lender allows it — changes capacity so dramatically, and why the reverse journey, stretching short-term debts across a redraw or refinance, deserves a hard look at total interest before it is celebrated as a capacity win.

Worked check: could they hold all three at once?

Suppose the household borrows moderately rather than maximally: a $450,000 home loan instead of their $550,400.12 ceiling. Assessed at 8.75%, that loan consumes $3,540.15 a month of their surplus, leaving $789.85. That leftover, pointed at unsecured settings (9.95%, 5 years), supports about $37,217.58 of personal borrowing; pointed at car settings (7.50%, 7 years), about $51,495.24 of car finance. Both fit — but not both together, and neither leaves a buffer of their own beneath the buffers the lenders applied. The exercise is the whole article in miniature: capacity is a single pool with several claims on it, and the only households who know their true borrowing power are the ones who add the claims up before they sign, not after.

Capacity is necessary — it is not sufficient

Everything in this article is about one gate: the serviceability test. Passing it does not approve any of these loans, because each product stacks its own gates behind it. The home loan adds the property (valuation, and a deposit that satisfies the lender’s loan-to-value limits, with mortgage insurance beyond them). The car loan adds the vehicle — its age and value cap the term and sometimes the amount, whatever your surplus says. The personal loan, having no security to fall back on, leans hardest on credit history and employment stability; the same surplus that prices out at $204,029.21 of theoretical capacity will be trimmed, sometimes hard, by an applicant profile a lender cannot verify or does not like. And the investment loan adds the property’s rent evidence — a signed lease outranks an agent’s estimate. Read the capacity figures in this article as ceilings set by arithmetic. The approvals live underneath them.

One surplus, spent once

The thread through all three cases: borrowing capacity is a property of your whole position, not of the loan in front of you. The mortgage test, the personal loan test and the car loan test are the same test with different dials, and every loan you hold re-prices every loan you apply for next. That is why the useful order of operations is the one lenders use — total position first, individual loan second — and why a change that looks small in isolation ($520 a month of car repayment) can be the largest number in the room (over $66,000 of home loan capacity) once the annuity factor has had its say.