How much can you borrow for the next investment property?

Models the APRA 3% buffer on top of your proposed rate, the standard 20% rental income haircut, and your household's living-expense floor. Real lender calcs vary 30-50% — start here, then sharpen with a broker.

Frequently asked questions

Why is my real bank-assessed capacity different?

Every lender has a proprietary serviceability calculator, and each one weights things differently: • Rental income haircut — banks discount expected rent by 20-30% to account for vacancy + maintenance + ownership costs. • Living expenses — banks use the higher of (a) what you declared and (b) the HEM benchmark for your household composition + post-code. • Existing debts — credit cards count at the limit (10% repayment assumption), not the balance. HECS counts at the prescribed % of gross income. • APRA 3% buffer — applied to the new loan AND every existing variable-rate loan in your portfolio. Fixed-rate existing loans are sometimes assessed at fixed-rate, sometimes at fixed+3%. This calculator gives you a rough order of magnitude. A broker plugging your numbers into 6-8 lender calcs will get a spread that varies by 30-50% across lenders for the same applicant.

What does the 3% APRA buffer mean in practice?

Banks must prove you can repay the loan even if interest rates rise 3 percentage points above the actual loan rate. A loan offered at 6.5% is assessed at 9.5% for serviceability. This is why pre-2022 borrowing capacity was much higher — back when rates were 2-3%, the buffered assessment rate was 5-6%; today's borrowers are buffered against 9.5%+, which mathematically halves what the same income can support.

Does an existing investment property help or hurt my capacity?

Both. Banks add 80% of expected rent to your income (helps) but assess 100% of all your existing investment loans at the buffered rate (hurts). Net effect: a positively-geared property usually adds capacity; a negatively-geared property usually subtracts it. Some lenders are friendlier than others to investors with multi-property portfolios — it pays to shop multiple banks once you have 3+ investment loans.

How accurate is this for a self-employed applicant?

Less accurate. Self-employed borrowers are assessed on 2-year average net business income (sometimes addbacks for depreciation + interest paid, sometimes not) — the calculator's 'gross household income' field is harder to set right. ABN-borrowers should plug in their TAXABLE income (post-deductions, post-superannuation) as a conservative starting estimate, then expect the broker's calc to come in 10-25% above that with addbacks applied.

What's a realistic rental income haircut?

Most lenders apply 20% (i.e. they count 80% of expected rent). A handful of investor-friendly lenders go to 90% counted (10% haircut). New-build / off-the-plan properties sometimes get a higher haircut because the rental estimate is unverified. The calculator uses 80% as the default — adjust if you know your target lender's policy.