What is a serviceability buffer?

It's the extra percentage the bank adds to your interest rate when it tests whether you can afford the repayments. The standard is 3%, so a loan is tested as if rates were 3% higher than what you'll actually pay. Some lenders use 2%, and a few offer 1% on refinances that meet their conditions.

Does Centrelink or child support count as income?

Often, yes, if it's regular and expected to continue. Family tax benefits, child support with a history of being received, and some pensions can be used by many lenders. Unemployment benefits generally can't.

Why did two banks give me different borrowing amounts?

Different buffers, different rules on which income counts and how much of it, and different living expense benchmarks. The same application genuinely produces a different number at every lender.

Does HECS reduce how much I can borrow?

Yes. The compulsory repayment comes off your income before the bank runs the equation. A handful of lenders leave it out of their debt-to-income ratio, which helps at the margin, but the repayment itself still counts.

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Straight Answers · First home

How much can I actually borrow?

Bayley Clarke · Mortgage broker on the road · Last checked 3 September 2026 · 4 min read

The short answer

It's going to depend on which bank you're asking. Looking at all banks, the biggest thing when it comes down to how much you can actually borrow is it's all an income versus outgoings equation.

The bank wants your income, anything regular on top of it, and every debt you're carrying. Then, before it tells you a number, it adds a buffer to your interest rate to check you'd still cope if rates went up. Not every lender adds the same buffer, so the same person gets a different number from every bank.

The ninety second version. The rest of this page is the detail underneath it.

What goes into the equation

The bank's going to want to understand what your income looks like first. Casual, part time, full time, self-employed. Then they look at anything you get on top of your regular income, whether it's penalties, allowances, bonus, Centrelink payments or child support, anything that's seen as somewhat regular or consistent. Some of that gets counted in full, some gets shaded, and some lenders won't touch a particular type at all.

Then come the outgoings. Your other debts, whether it be credit cards, personal loans, car loans, HECS, anything like that, all get factored in. A credit card counts on its limit, not what you owe. A car loan counts at its full repayment. And underneath all of that sits a living expense figure the bank sets for you, which has its own page, because it surprises almost everyone.

Income in, outgoings out, and what's left is what the bank will let you put towards a mortgage. That's the whole engine. Everything else is how each lender turns the dials.

The buffer: why the bank's number is lower than your maths

Before the bank actually tells you how much you can borrow, they add what's called a buffer to your interest rate. The question they're answering is: if interest rates were to go up 3%, can you still afford the loan we're about to say you can? So they don't test your repayments at the rate you'll pay. They test them at the rate plus the buffer.

Now, not every lender adds 3%. That's the standard the big banks work to, and most of them also have a floor rate underneath it, so the test never drops below a certain level even when rates fall. But there's a group of lenders that buffer at 2% instead, and a few of them run a much lower floor. On the same income, a 2% buffer can mean tens of thousands of dollars more in borrowing capacity than a 3% one.

Then there are the 1% pathways. Several lenders will test a refinance at just 1% over the rate, provided you're not borrowing more, your loan is under 80% of the property's value and you've got a clean repayment history. That's the escape hatch for people who can plainly afford the loan they already have but fail the standard 3% test at a new bank. It's a refinance tool, not a purchase tool, and every lender attaches its own conditions.

Why every bank gives you a different number

How much you can borrow, again, with each lender is going to be very different. Same payslips, same debts, and one bank says $580k while another says $660k. The buffer is the biggest reason. The income rules are the second: which bank counts 100% of your overtime, which shades it, which one excludes HECS from its debt ratio. The living expense benchmark is the third.

That's the actual work of a broker on this question. It's not finding the cheapest rate. It's knowing, before anything goes on your credit file, which lender's calculator is going to read your situation most generously and still approve you. The overall rule of thumb is income versus outgoings, and whether that lender is buffering your interest rate, and at what percentage.

The honest bit: a bigger number isn't always the goal

The lender that gives you the biggest borrowing capacity isn't automatically the right one. The buffer exists for a reason. If a 2% buffer gets you approved for a loan that only works while nothing goes wrong, that's a bank's problem solved and yours just starting.

What I'd rather you have is the range: what the conservative lenders say, what the generous ones say, and where your own budget actually sits between them. Then you pick a purchase price you can live with, not the top of the biggest number.

Want your number across the lenders, not just one?

A 30 minute call. Income, debts, and I run your scenario across the lenders I work with so you know your range before you look at a single property. Nothing on your file.

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Next question

Why does the bank ignore my actual budget?

The living expense figure under every borrowing calculation, and why proving you spend less doesn't help.