A borrowing estimate is a starting point, not an approval. Two lenders can assess the same information differently, and a maximum figure may not reflect a comfortable household budget.
Income and employment
Lenders assess the amount, source, consistency and likely continuation of income. Base salary may be treated differently from overtime, commission, bonuses, allowances, casual work, rental income or business earnings. A new role or probation period can also affect what evidence is required.
Self-employed income is commonly assessed using business and personal financial information over a required period. The calculation can vary with business structure, recent performance and lender policy.
Debts, limits and dependants
- Existing home, investment, vehicle and personal loans
- Credit card limits, even when the balance is repaid
- Buy-now-pay-later and other credit facilities
- HECS-HELP or other study loan obligations
- Child support and recurring commitments
- Number and ages of dependants
Closing an unused facility may change an assessment, but do not make changes solely for an application without considering access to funds and broader needs.
Living expenses and financial resilience
Lenders ask for realistic household expenses and may compare the information with benchmarks. Housing, food, transport, insurance, education, childcare, medical costs, subscriptions and discretionary spending all form part of the picture.
A household should also consider whether repayments would remain manageable if costs rise or income changes. Borrowing the maximum available is not automatically the right decision.
Loan amount, term and assessment settings
The proposed term, repayment type, interest-rate assumptions, existing property debt and deposit can all affect the result. Lenders generally test repayments at a higher assessment rate than the actual offered rate to allow for a buffer.
Property type and location can influence the acceptable loan-to-value ratio or valuation approach. A strong borrowing estimate does not remove the need for the property to meet lender criteria.
How to prepare for a borrowing discussion
- Gather current income evidence
- List every debt and credit limit accurately
- Review recent household spending
- Confirm deposit funds and likely purchase costs
- Identify expected changes to work, income or expenses
- Set a repayment level that feels sustainable, not only a target purchase price
For an independent repayment estimate, use the Australian Government's Moneysmart mortgage calculator.
Continue with the Home loan pre-approval guide, return to the Guide hub, or book a consultation.