Mortgage Affordability Calculator Australia 2026

It uses a rule of thumb: up to 35% of your gross monthly income, minus your declared expenses and other loan repayments, is treated as your affordable monthly repayment, then converted into a loan amount at your chosen rate and term. This is a simplified starting point, not a lender's serviceability assessment — real lenders work from income after tax, substitute your expenses with the higher of your declared amount or the HEM benchmark, and apply APRA's mandatory 3-percentage-point stress buffer. Use this to gauge a ballpark range before speaking to a broker or lender.

APRA requires Australian lenders to check you could still afford repayments if rates rose by at least 3 percentage points above your actual rate. If you're applying at 6.5%, the lender also tests serviceability at 9.5%. On a loan sized to a $3,480/month repayment at 6.5%, the same loan costs about $4,620/month at the 9.5% stress rate. Your borrowing power is ultimately capped by what you can afford at the stress rate, not the current rate.

The Household Expenditure Measure (HEM) is the minimum living-expense benchmark Australian lenders use. Even if your actual expenses are lower, a lender substitutes the HEM figure for your household size and income when it's higher than what you declared, which reduces your assessed borrowing power. This calculator uses your declared monthly expenses directly, so an unrealistically low expenses figure will make your result more optimistic than what a lender would actually approve.

LVR (Loan-to-Value Ratio) is your loan amount divided by the property value. Below 80% LVR, no LMI is required. Between 80-90% LVR, LMI applies and typically costs 1-4% of the loan amount. Above 90%, only specialist lenders participate, usually at higher rates.

No. This is a planning estimate using standard serviceability assumptions. A real pre-approval considers your credit score, employment history, assets, and the specific lender's own policies, which can differ from the industry-standard rules used here. Use this calculator to narrow your search range, then get pre-approved before making offers.