How to boost your borrowing power

Lenders look at three things: income, expenses, and existing commitments. We unpick how to legitimately strengthen each, and what HEM, HECS and casual income actually do to the calculator.

12 min readBy Sarah ChenStage 4 of 8

Your “borrowing power” isn’t one number. It’s a band, and lender policy moves the band by 8–15% between cheapest and most generous.

HEM and your real expenses

The Household Expenditure Measure (HEM) is a benchmark lenders cross-check your declared expenses against. If your declared spend is below HEM, the lender substitutes HEM. Above HEM, your declared figure wins.

HECS-HELP impact

A $35,000 HECS balance with $4,200/yr repayments reduces your borrowing capacity by roughly $35,000–$50,000. Paying it off only helps if you have the cash sitting flat, otherwise, your deposit is more powerful.

Borrowing power calculator

Borrowing power

Borrowing Power Calculator

Estimate how much you could borrow based on your income, expenses and household.

Applying

Annual income (before tax)$100,000

$30,000$500,000

Monthly living expenses$2,000

$500$10,000

Existing monthly debt repayments$500

$0$5,000

Number of dependents0

Indicative borrowing power

$452,000

Up to $483,000 if the lower end of our HEM estimate applies. Indicative only: after-tax income, the higher of your expenses and our HEM estimate, and a 6.2 per cent rate tested at 9.2 per cent over 30 years. Lenders add their own margins and policy on income type and credit history. Full calculator

Find me a vetted broker

Estimate only. Lender assessment depends on full income/expense picture and credit file.

Want a richer scenario? Open the full borrowing power calculator