How much can I borrow calculator will determine what amount a lender may lend you based on your income and expenses. This is a guideline and most institutions will also take into consideration the location and type of property as well as personal credit history.
- Income is taken as you and your partner's (if you have one) net incomes, rental incomes and bonus etc if applicable.
- Expenses that you can enter are living expenses (minus rent), any loans, car loans & credit card repayments.
- The amount you can contribute to the loan is calculated as the net monthly income minus net monthly expenses.
- Other expenses taken into consideration in the calculations are "Living Expenses". These are based on the Home Expenditure Measure Living Expense. If your entered living expenses are higher than the HEM, then your actual living expenses are used for calculations. If your living expenses are lower than the HEM, the HEM values are used. HEM living expenses amount depends on income, number of dependants and single/couple status.
- Credit Card repayments are calculated at 3% of the Limit.
100% of the Income amount is used
80% of the rental income amount is used.
- The borrowing amuont is calculated using 5.75% or if the interest rate is greater than that, a buffer of usually 1.5% - 2.5% is added to that rate, depending on the lender. This is to ensure the borrower can repay the loan should interest rates rise in the future.
- The borrowing amount is rounded down to the nearest $1000.
- Some lenders have a minimum borrowing amount.
- One year is 52 weeks exactly, a month is 52/12 weeks and a fortnight is 26 weeks.
- Interest is calculated by compounding on the same frequency as the repayment stated, i.e. weekly, fortnightly or monthly.
- Repayments are made at the start of each period.
- Rounding is made at the end of the calculations and not at each payment period
- It does not take into account up-front fees and monthly/annual account fees.
- You can email your results to yourself and if you request, a copy of your results and contact information is sent to the web site owner.
- You can print your results for future reference.
- You should consult a finance professional before you make decisions based on this calculator.