Free planning tool
Borrowing Power Calculator
Get a conservative estimate of how much you may be able to borrow for a home in Wollongong and the Illawarra. The calculator works the way lenders do - it assesses your repayments at a buffer above your expected rate, so the range you see is a careful starting point, not a promise of finance.
Borrowing power for home loans Wollongong buyers are planning
Before you talk to a lender or start inspecting properties, it helps to have a realistic figure in mind. Borrowing power is simply the amount a lender is likely to advance based on your income, your regular spending, and any debts you already carry. This calculator gives you a careful first estimate so your search across Wollongong and the Illawarra starts from solid ground rather than a hopeful guess.
Enter your numbers
All figures are before tax where noted. Nothing you enter is sent anywhere - the estimate is worked out in your browser.
General advice warning
Information on this website is general in nature and does not constitute personal financial advice. It does not take into account your individual situation, objectives, or needs. Consider whether the information suits your situation before acting on it, and seek independent professional advice if needed.
Not an offer of credit
Any indication of borrowing power, rate, or product on this website is not an offer of credit. All credit applications are subject to the lender's credit criteria, serviceability assessment, valuation outcome, and approval process. Approval is at the lender's discretion.
How this is calculated
The calculator follows the same broad logic Australian lenders use to test whether you can comfortably manage repayments. It is a simplified model, and each lender applies its own policies, so treat the result as a guide.
1. The assessed rate and the 3% buffer
You enter the rate you expect to be offered. The calculator then adds 3 percentage points to it and tests your repayments at that higher assessed rate. APRA (the Australian Prudential Regulation Authority - the banking regulator) has expected lenders to apply a serviceability buffer of at least 3 percentage points to new home loans since October 2021 under its macroprudential settings, so lenders check you could still afford the loan if rates rose. More detail is on apra.gov.au.
2. Living costs and the baseline
Lenders compare your declared expenses against a minimum cost-of-living figure and use whichever is higher. This calculator applies a simplified HEM (Household Expenditure Measure - the standard cost-of-living baseline used by Australian lenders) of about $2,200 a month for a couple, plus $600 per dependant, and uses the larger of that baseline or your declared expenses. The real HEM is published by the Melbourne Institute and varies with income and postcode - our single baseline is a modelled simplification.
3. Tax and surplus
We reduce your gross income by a single simplified effective tax rate to approximate after-tax income, then subtract living costs and existing repayments to find the surplus available for a home loan. This is a disclosed simplification - real serviceability uses the full ATO tax scale plus the Medicare levy.
4. Solving for the loan
The monthly surplus is treated as your maximum affordable principal and interest (P&I - repayments that pay down the loan balance as well as the interest) repayment. Using standard amortisation over your chosen term at the assessed rate, we solve backwards for the largest loan those repayments could support, then present it as a conservative range around that figure.
Consumer tools and independent guidance are available from MoneySmart, run by ASIC (the Australian Securities and Investments Commission - the financial-services regulator), at moneysmart.gov.au.
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