What Is a Borrowing power calculator? 

A borrowing power calculator helps estimate how much you might be able to borrow based on: 

  • Income: Salary, bonuses, rental income.
  • Expenses: Living costs, childcare, discretionary spending.
  • Existing debts: Credit cards, personal loans.
  • Current interest rates and loan terms. 

Borrowing power calculators will usually include serviceability buffers, which is an extra interest rate margin lenders add to the current loan interest rate when assessing a borrower’s ability to repay a loan.  This helps ensure borrowers have the capacity to  manage repayments even if rates rise again. This protects both you and the lender, but it also gives you a financial wellbeing checkpoint. 

Why it matters in today’s market 

With rates possibly trending downward, borrowing capacity has increased for most borrowers compared to a year ago. For example: 

  • First home buyers may now qualify for properties that were previously out of reach
  • Investors might leverage improved capacity to expand portfolios
  • Owner-occupiers could consider upgrading or refinancing under more favourable conditions. 

However, increased borrowing power doesn’t mean you should borrow to the limit. Financial wellbeing is about balance and sustainability, not stretching yourself thin. 

How borrowing power calculators support financial wellbeing 

These tools aren’t just for banks. They’re powerful for borrowers too, especially at different stages of the home loan journey. Borrowing power calculators highlight how slight changes in expenses could significantly impact borrowing capacity: 

  • Reducing discretionary spending by even $200 per month could increase borrowing power by tens of thousands of dollars
  • Paying down a credit card before applying could dramatically improve your position. 

This reinforces the link between daily financial habits and long-term goals - a cornerstone of financial wellbeing. 

Practical tips 

  • Run scenarios: Use calculators to see how changes in expenses or debt affect borrowing power. 
  • Plan ahead: If buying is a goal, start reducing liabilities and building savings now. 
  • Think beyond the loan: Factor in lifestyle costs, emergencies, and future rate changes. 

Bottom line

Borrowing power calculators are more than just bank tools - they’re financial wellbeing dashboards. In a falling rate environment, they help you understand your capacity, make informed decisions, and avoid overextending yourself. Use them not just to see what you could borrow, but to plan what you responsibly should borrow for a secure financial future.  

Ready to take the next step?  

Give the BankVic borrowing power calculator a try by visiting Borrowing power calculator, to get an estimate of your potential borrowing capacity. 

We’re here to help  

If you have any questions about buying your first home, First home buying, call 13 63 73 or Book appointment to make an appointment with a BankVic Home Loan Mentor.  


The information in this article was current as at the time of publication only. The results of BankVic’s Borrowing Power Calculator are indicative only and do not constitute a loan offer, approval, pre-approval or a recommendation to enter into a credit contract.  This information is general in nature and does not take into account your personal circumstances. You should consider your financial decisions carefully and seek personal financial advice where appropriate. All loan applications are subject to lending criteria and approval. Terms, conditions, fees and charges apply which are available upon request. Police Financial Services Limited ABN 33 087 651 661 - trading as BankVic | AFSL and Australian Credit License 240293.