Every mortgage borrowing calculator is running the same lender serviceability sum, whether it shows its working or not. This article shows the working. It takes one household — a couple with a car loan, two credit cards and $80,000 saved — and answers the home loan borrowing power question the long way: income after haircuts, expenses at the floor, debts and card limits charged, the surplus tested at a buffered rate, until the maximum loan falls out of the arithmetic. No salary multiple, no rule of thumb — because lenders do not use either.

The household, and the five steps

The couple earn base take-home pay of $8,400 a month between them, plus regular overtime averaging $1,000 a month. They spend $3,600 a month on living costs by their own count, pay $520 a month on a car loan, hold credit cards with combined limits of $15,000 (balances cleared monthly), and are looking at a loan at 6.25% over 30 years. Here is what a lender’s assessment does to those numbers — the same steps the borrowing power calculator at the top of the hub page performs.

So: how much can I borrow for a home loan on these numbers? $550,400.12 — with a real repayment of $3,388.91 a month at the actual 6.25% rate, not the 8.75% test rate. People phrase the same question as how much can I borrow for home loan and deposit combined; that answer is the second figure: $550,400.12 of loan plus their $80,000 deposit gives a maximum purchase price of $630,400.12, before purchase costs.

The five steps are the calculator’s eight fields

Nothing in the walk-through is hidden machinery — the calculator on the hub page is these five steps with input boxes. Take-home pay and living expenses are steps 1 and 2 (enter your income after any shading you want to test, and your expenses at the higher of your real figure or a realistic floor). Existing repayments and total card limits are step 3 — limits, remember, not balances. The loan rate, term and assessment buffer are step 5’s dials, and the deposit sits outside the loan calculation entirely, added at the end to give the price. The tool’s own default example — $6,800 of take-home pay against $2,800 of expenses, $450 of repayments and $10,000 of limits — produces a surplus of $3,250 and a maximum loan of $422,674.34, which is why those figures recur across the hub page: they are the worked example, not a promise about yours.

Mortgage borrowing power is the same sum, whatever the sign on the door

Whether you reached this page from a borrowing calculator home loan search, a borrowing calculator mortgage listing, a borrowing power calculator home loan query or a bank’s own tool, the machinery underneath is the one above. What differs between lenders is the settings: the buffer (2 to 3 percentage points across the market — in Australia, APRA has expected banks since October 2021 to test at at least 3.0 points above the product rate, APRA 2021), the expense floor table, the shading on variable income and rent, and the percentage charged on card limits. That is why the home loan how much can I borrow question gets a different answer from every lender you ask: the household is constant, the dials are not. An honest home loan calculator borrowing power estimate — including ours — is therefore a well-built approximation of your ceiling, not a quote.

What moves this household’s number

Because the calculation is printed, each lever can be priced exactly. Clearing the car loan before applying removes the $520 repayment: the surplus rises to $4,850.00 and the maximum loan to $616,498.98. Cutting card limits from $15,000 to $5,000 — one phone call, no cash — lifts the maximum to $588,534.08. Doing both reaches $654,632.94. Working the other way, choosing a 25-year term instead of 30 trims the maximum to $526,671.96 (while retiring the debt five years sooner), and landing a sharper rate of 5.75% instead of 6.25% raises it to $576,359.97 — note that the rate lever works through the assessment rate too, since the buffer rides on top of it. And the two quiet taxes from step 1 and 2 are worth naming: the overtime haircut cost this household $101,690.55 of loan against counting the income in full, and the expense floor cost $38,133.96 against their declared spending.

Why the answer is not a multiple of your salary

Folklore says lenders lend five or six times your salary. On this household the folklore looks almost right by accident: their maximum loan of $550,400.12 is 4.99 times their assessed annual income of $110,400.00. But the multiple is an output, not an input — change the commitments and it collapses. Strip away the car loan and the card limits entirely and the same income supports $673,699.92, a multiple of 6.10. Load the same salary with a second car repayment ($1,050 a month of repayments) and $30,000 of card limits, and the maximum falls to $425,829.19 — a multiple of 3.86. Identical salary, identical rate, and the “multiple” swings from 3.9 to 6.1. Any table that quotes borrowing power from salary alone is quoting one of those households and silently assuming you are it.

Reading your own result

Three habits make an estimate like this useful rather than decorative. First, treat the surplus as the sensitive number: at this household’s test settings, every $100 a month of surplus is worth $12,711.32 of loan — so a $100 discrepancy in your expense estimate matters more than half a percent of rate shopping. Second, expect a range, not a point: across the common 2-to-3-point buffer span alone, this household’s answer runs from $576,359.97 to $526,331.51, before any lender has touched the expense floor or the income shading. Third, if the estimate falls short of the price you are chasing, work the levers in the order the previous section priced them — limits first (free), small debts second (they remove whole repayments), deposit last (it moves the price ceiling, not the loan). The estimate is the map of the assessment; the assessment itself is the territory, and it is walked with documents, not estimates.

Read the table as a ranking of effort. The two largest gains cost no interest-rate luck and no extra income: they are paperwork — a closed card account and a finished car loan. The rate gain is real but smaller, and it depends on a lender offering it. The term row is the honest trade in the list: less capacity now, in exchange for five fewer years of payments.

What the estimate cannot see

A serviceability estimate, this one included, prices the household. A real assessment also prices things outside it. The property itself: valuation below the contract price shrinks the loan no matter what the surplus says, and flats and apartments can carry body-corporate or strata fees that lenders add to your expenses. Your deposit’s history: above 90% loan-to-value, many lenders want to see the deposit genuinely saved over time rather than assembled last week. Your employment shape: probation periods, casual hours and fresh self-employment are all shaded or set aside by some lenders regardless of what you currently earn. And your credit file: the sum assumes your commitments are the ones you declared. None of this makes the estimate useless — it makes it a first pass, the number you plan around while you assemble the documents that turn an estimate into an application.

The deposit is a separate ceiling

Borrowing power answers the loan question; the deposit answers the price question, and the two ceilings do not always agree. This couple’s $550,400.12 loan against their planned $630,400.12 purchase is 87.31% of the price — above the 80% loan-to-value line where lenders typically require mortgage insurance or a larger deposit. To hold the same loan at exactly 80%, they would need to shop at $688,000.15 with $137,600.03 down, or keep the $80,000 deposit and accept a smaller loan. Transfer taxes, legal fees and lender fees sit outside both calculations and come from the same cash pile. And where mortgage insurance does apply, its premium is commonly added to the loan itself — which means it, too, has to fit inside the surplus the serviceability test measured. The complete answer to mortgage how much can I borrow is therefore always two numbers — the loan the surplus supports, and the price the deposit allows — and the lower of the two ceilings is the one that binds.