Borrowing capacity
The maximum amount a lender is willing to lend you, based on your income, expenses, debts and the lender's own rules.
- Assessed using a buffer above the actual interest rate
- Reduced by existing debts and credit card limits
- Varies between lenders
How it is assessed
Lenders test whether you could still repay if rates rose, using a serviceability buffer. They count your income, living expenses, existing loans and credit limits, and apply their own policies to rental income.
Limits on high debt
Since 1 February 2026, APRA has limited lending at a debt-to-income ratio of 6 or more to 20% of each bank's new lending, separately for owner-occupiers and investors.
Two investors with the same income can have very different capacity. Structure and lender choice matter, which is why a broker comes first.
Common questions
How can I increase my borrowing capacity?
Reducing debts and unused credit limits helps. A broker can advise on lender policy.
Does rental income count?
Usually in part. Lenders typically count only a percentage of the rent.
Related terms
Sources
General information only. It does not consider your objectives, financial situation or needs, and is not financial, credit, tax or legal advice. Rules change, so check current law and get advice from a licensed professional before acting.