Borrowing Power Calculator

Borrowing Power Calculator

Do you dream of a home near the coast, but think the price tag is out of reach? You could be surprised by how much money your home loan approval could generate! 

Your borrowing power is an important calculation that your lender uses. Typically calculated using your income minus your outgoings and expenses, your borrowing power will dictate the mortgage amount available.

This calculator aims to ensure that your home loan is affordable. It will determine how much spare cash you have each month for your home loan repayments, also known as your net surplus income. Your mortgage repayments will consist of a principal amount and an interest amount.

You can increase your borrowing power by making a few simple changes, and persuading lenders to increase your home loan amount. 

Ultimately, you need to either increase your income or decrease your outgoings and expenses. Ideally, you should increase your income and decrease your outgoings to maximise your borrowing power!

Remember that unused credit limits will also impact your borrowing power, so close down any credit cards that you do not need.

Find out how much you can borrow today by using Odin Mortgage’s Borrowing Power Calculator!

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What Is Borrowing Power?

Borrowing power is the amount of money a lender thinks you are eligible to borrow when buying a home. It indicates how creditworthy you are, taking into account your income, debts, and expenses.

Your borrowing power will affect how much you can borrow to buy a home in Australia. It will also ensure that you can afford both your principal and interest repayments each month without inducing mortgage stress.

How Is Borrowing Power Calculated?

Borrowing power is calculated by considering your income, savings, debts, expenses, loan deposit, and any dependents.


Your income is vitally important when calculating your borrowing power! Make sure to total all income streams, including Aussie income and overseas income. 

Do you work freelance seasonally? Add that income to your total earnings! The higher your income, the higher your borrowing power may be! If you are unsure how to include overseas income in your calculation, speak to an Odin Mortgage broker today!


If you have substantial savings, lenders will judge your financial competence to be high! You will be deemed a responsible borrower and so your borrowing power will improve. Lenders love good savers!


Your debts are liabilities and will be assessed when calculating your borrowing power. This may include personal loan repayments, investment property expenses, and car loan monthly repayments. 

It is important to try to reduce your debts as much as you can before applying for a home loan to improve your financial situation.

However, the money that you owe a lender is not the only factor to reduce your borrowing power. If you have any unused credit limits, those amounts will also be used against your borrowing power.


How do you spend your money? Your monthly living expenses will be assessed to determine the frivolity of your spending. You may need to show bank statements to lenders if required.


How much money have you saved to place down on a home loan deposit? Generally, the higher the deposit, the more options you have available to you. Your borrowing power will allow a higher amount of money to be borrowed for your home loan purchase.

Additionally, if you are hoping to secure a home loan with a smaller deposit, you may need to pay lender’s mortgage insurance. 

Lender’s mortgage insurance is typically requested if your deposit is less than 20% of the property value. This then becomes an extra expense that will ultimately impact your borrowing power.


If you have children, your borrowing power will be impacted. Each dependent is considered to be an expense and will reduce your borrowing power proportionally.

Whether you are applying for a home loan as a single or joint applicant will also impact your borrowing power.

What Is Net Surplus Income?

Net Surplus Income involves adding all income together and deducting all ongoing debts and living expenses. This is the main formula used when calculating your borrowing power.

The figure left over is the amount of money that can be used to pay a potential home loan repayment. 

For example, assume your net income per month is $5,300 and your ongoing debts and living expenses total $3,100. Net Surplus Income assumes that you have $2,200 per month for a home loan repayment instalment. 

Check out typical repayment instalments using Odin Mortgage’s Mortgage Repayment Calculator. You can also choose to add extra repayments to the calculator to see how much faster you can clear your home loan! Save yourself interest and payment time!

How Much Can I Borrow For My Income?

The amount of money you could borrow for your home loan depends entirely on your own personal situation. To borrow the maximum amount of money possible, aim to keep your income high and your outgoings low.

Find out the exact amount of money that you can borrow for your home loan by using Odin Mortgage’s Borrowing Power Calculator

You can choose whether to apply as a single or joint applicant and input information applicable to you. A different comparison rate and applicable bank fees may be required for varied options. 

However, the calculator will tell you instantly how much you could borrow for your home purchase!

Should I Borrow the Maximum Money Available?

Borrow the amount of money for your home loan purchase that you can comfortably afford. Typically, try to limit your home loan repayments to no more than 30% of your monthly income. 

Therefore, if you earn $4,500 per month, aim to secure a home loan with repayments under $1,350 monthly. This will ensure that your home loan repayments remain at a manageable level and so you can avoid mortgage stress!

Struggling to repay your home loan repayments is a slippy slope to fall down. Defaulting repayments may mean you could ultimately lose your home if the problem is not rectified.

Principal and Interest Repayments

You could make your home loan repayments cheaper by switching to an interest-only mortgage. Typically, your repayments consist of principal repayment and interest repayment. 

The principal repayment will be deducted straight from the money you borrowed to buy your home. The interest repayment goes straight to the lender and is their interest on the money you have borrowed.

You may be able to switch to an interest-only deal that immediately reduces the amount of money you need to pay each month. You will only pay the interest repayment, and will not pay principal repayments. 

However, this will mean that you do not reduce the home loan balance. The amount of money you borrowed from the lender will never decrease.

This is a good option in the short term, however, to keep your costs low. You may increase your equity in the property simply due to property market rises. This will also increase if you have bought a property in an area of regeneration.

How Can I Increase My Borrowing Power?

You can increase your borrowing power by increasing your income and decreasing your ongoing debts and expenses. 

Not only will this increase your borrowing power but you will also be in a much better position to pay your home loan instalments as you will have greater surplus income.

Here are the top ways to boost your borrowing power:

1. Increase Your Income

Are you able to work longer hours or complete some additional freelance work part-time? Increasing your income is the main way you can increase your borrowing power and borrow a higher sum for your home loan purchase.

2. Decrease Your Spending

Borrowing power is calculated by deducting your ongoing debts and expenses from your income. If you reduce your expenses, your borrowing capacity will increase!

Search through your bank statements and total your spending in different areas. How much did you spend on coffee last month? Realising where your money is going can help you to become more reserved with your spending habits.

Try budgeting your monthly expenses. It can make a real difference to your bank balance!

3. Clear Debts

When you are preparing to start a home loan application, clearing debts should be at the top of your list of things to do! 

When ongoing debts such as credit card payments and overdrafts are deducted from your income, your borrowing power declines. If there are fewer debts to deduct, your borrowing power will improve!

Make a list of the liabilities you are responsible for. Then, make a plan inside of your budget and decide when each debt will be cleared and how.

Not only will your borrowing power increase, but your credit score will also rise!

4. Unused Credit?

Do you have credit cards that you keep for a rainy day? Well, that unused $5,000 credit card is damaging your borrowing power! Any credit limits, whether used or unused, are considered when calculating your borrowing power.

Close down any credit cards or other credit accounts, even if they are unused. You will see your borrowing power increase immediately!

Use Odin Mortgage’s Borrowing Power Calculator!

Find out your borrowing power today, using our specialist calculator! Simply enter your income details, expenses, and loan details, along with your application status and whether you have any dependents.

Our calculator will tell you the amount of money you could possibly borrow for your home loan purchase. Play around with the figures entered and see how your borrowing rises if you clear some ongoing debts!

Let Odin Mortgage Secure Your Home Loan Today!

Odin Mortgage are Expat experts! We can help you secure an Australian mortgage, whatever your circumstances!

Are you an Aussie citizen or permanent resident wanting to buy a home in Australia? Are you a foreign national hoping to invest in property Downunder? Or, are you looking to refinance your Australian home loan to a lower rate?

Regardless of your situation, Odin Mortgage brokers are waiting to hear from you! Request a call and contact Odin Mortgage today and begin your journey to property ownership in Australia!

Frequently Asked Questions

Who is Odin Mortgage?

Odin Mortgage are leading brokers, specialising in Australian home loans for Expats! We are Australian Credit Licence holders to can guide you through to loan approval. 

But, what does a mortgage broker do? We act as a third party between you and the lender, finding you the best home loan interest rates and a great loan term. Our service is free for you to use so get in touch today!

Read our FAQs for more information about how Odin Mortgage can help you!

Do I need to pay lenders mortgage insurance due to a poor credit history?

No, not necessarily. Lender’s mortgage insurance is required when you are placing a smaller deposit on your home loan. Typically, a lender will ask you to arrange LMI if your deposit is below 20% of the property price.

Credit history and your credit score are an overall overview of your financial commitments. What are your loan amounts and credit card limits, and do you pay repayments on time? 

A lender may decide to offer you a higher interest rate due to a low credit score, however.

Does my borrowing capacity affect my loan amount for an investment property?

Yes, borrowing power will affect how much you can borrow for investment properties. However, your personal financial circumstances determine how much you can borrow overall and everyone is different! 

Contact Odin Mortgage brokers for custom advice and tailored guidance to gain your home loan approval!

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