Why can’t you just tell me how much I can borrow in 5 seconds?

Short answer: because the number isn’t one number. It’s a moving target that shifts with the lender, the way you earn, the shape of your household, and about a thousand tiny rules that never make it onto an expensive bank ad.

I didn’t get it either - until I became a broker.

How do lenders really decide your borrowing capacity?

“But the bank website says I can borrow $1m.”

Those online calculators are a loose approximation. They're built on simple assumptions that normally don’t match your real life, and:

• Assume a neat salary with no overtime, bonuses, or commissions.

• Use a generic living‑expense figure rather than your actual spending.

• Treat debts in a very basic way or ignore quirks that affect capacity.

  
  

A lender’s real calculator is a different beast. Behind the scenes, banks run full cash‑flow models with policy shading, risk weightings, haircuts to certain income types, and buffers that vary from bank to bank. The same client will show very different borrowing power across lenders.

Why different lenders give different answers

Think of each lender as a chef with a different recipe. The ingredients are similar, but the method and seasoning change the dish.

• Risk appetite. Some lenders are comfortable with self‑employed income, others are cautious. Others prefer professionals with stable PAYG income. And others price risk more highly.

• Policy settings. Postcode restrictions, property types, loan purpose, and LVR all change how much they’ll lend and at what rate.

• Assessment buffers. Lenders test your repayments at a higher “stress rate,” not the rate on the brochure. Those stress rates and buffers differ.

• Income shading rules. Overtime, penalties, commission, bonus, allowances, rent, and family benefits all get shaded differently, and likely require history.

• Living expenses. Every lender references a minimum benchmark like HEM, but your declared spending and household make‑up can push this higher.

• Debts and limits. Credit cards, HECS/HELP, car loans, buy‑now‑pay‑later, personal loans, and interest‑only investment loans each are treated differently.

  
  

What actually drives borrowing capacity

A super-high-level look at the big ones:

How you earn your income

• PAYG: Base salary is paramount. Overtime and penalty rates may need a 6 - 24-month history and may be shaded. Commission and bonus often need a two‑year history and may be averaged, or the lower taken. Allowances can be accepted, partly accepted, or ignored altogether.

• Self‑employed: Lenders look at company or sole trader tax returns and financials. They’ll consider add‑backs like depreciation, one‑off expenses, interest on business loans that will be refinanced, and sometimes accountant‑verified adjustments. Not all lenders allow the same add‑backs. Trust distributions, retained profits, and dividends are each treated differently.

Your household

• Dependants: Each child increases living‑expense assumptions. Two kids vs three kids can change capacity a lot.

• Where you live: Benchmarks vary by household size and income band. Your disclosed spending also matters if it sits above the benchmark.

Your debts and commitments

• Credit cards: The limit matters more than the balance. A $20k limit weighs heavily on servicing, regardless of how little you use it.

• HELP/HECS: Reduces capacity even if you’re not paying much right now.

• Car and personal loans, BNPL: All reduce the surplus cash flow that supports a bigger loan.

• Existing mortgages: Rates, remaining terms, and whether they’re interest‑only or P&I all change the model.

The property and the loan

• Purpose: Owner‑occupied vs investment can attract different rates, buffers, and shading of rental income. Negative gearing is not treated the same everywhere.

• LVR and LMI: Higher LVRs can trigger LMI and policy changes. Lender appetite at 80% vs 90% can be very different.

• Interest‑only vs P & I: IO often reduces capacity due to the way lenders model the switch to P&I later.

  
  

A simple example of why answers differ

Same client, three lenders. Identical income and debts. Three results.

What changes under the policy bonnet	Lender A	Lender B	Lender C
Overtime counted at	80% of 2‑year avg	50% of 12‑month avg	Not used
Bonus counted at	70% of 2‑year avg	100% of last year	50% of 2‑year avg
Rental income shading	20%	30%	20% plus higher costs
Assessment buffer	Moderate	High	Moderate
Borrowing capacity	$1.05m	$890k	$980k

Same person, three different numbers. That is normal.

Why walking into your local bank can sell you short

Your own bank can only offer you what fits their recipe. If your income is a bit lumpy, if you’re self‑employed, or if you sit outside one rule, you can look “too hard” when in reality there are many lenders that will assess you differently, sometimes with a better rate as well. A broker can test your position across a wide panel, align the policy with your situation, and avoid dead ends.

“So why can’t you just give me a number on the spot?”

A real number needs real data. With the docs required, I can model your position properly and tell you where you land across multiple lenders. Off‑the‑cuff guesses are either false hope, or needless fear.

What I need to give you a precise answer

Use this checklist and you’ll get a clear figure, faster:

• Employment type and history. PAYG or self‑employed, plus time in role.

• Income documents. Payslips, contracts, bonus/commission history, or full financials and tax returns for self‑employed.

• Household details. Adults, kids, childcare, schools if relevant.

• Living costs. Your real monthly spending on the big buckets.

• Debts and limits. Credit cards, HECS/HELP, car loans, BNPL, existing mortgages.

• Target property. Price range, location, owner‑occupied or investment, deposit.

  
  

What's great about nuance

All this nuance is not a punishment. It is the opportunity. With access to over 50 lenders, I can pick the policy that fits you, not squeeze you into a shape that doesn’t. The result is often a better loan size, a better rate, or both. That is the point of using a broker who lives in these calculators every day.

Quick FAQ

Do calculators ever match the final number? Rarely, but not reliably. Treat them as a general guide only.

Can you “make” one lender see it another way? We can’t rewrite policy, but we can choose a lender whose policy already fits your facts. Where appropriate we can also present your case to a credit team for an exception.

Why does my neighbour borrow more on less income? Different debts, fewer dependants, different spending, different lender. There are so many levers.

Ready to run your real numbers?

If you want a straight answer, I’ll give you one. I just need your relevant documents, and I'll use the real calculators, not the approximate version online.

General information only. This is not personal financial advice.