How Much Can I Borrow for a Home Loan in Australia in 2026? Real Numbers, Real Bank Rules
- Brampton Finance
- 2 days ago
- 3 min read
“How much can I borrow?” is the most searched mortgage question in Australia — and in 2026, it’s also the most misunderstood.
Online calculators routinely overestimate borrowing power. Banks assess borrowers very differently from one another, and small changes in structure can mean the difference between buying the home you want or falling short by hundreds of thousands of dollars.
At Brampton Finance, we help borrowers across Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Hobart and regional Australia understand their real borrowing capacity — based on how banks actually assess loans in the current market.
Why Borrowing Power Is Tighter in 2026
Australian lenders are still operating with conservative settings following years of rate volatility. In 2026, borrowing capacity is heavily influenced by:
higher assessment interest rates
serviceability buffers applied above actual rates
stricter treatment of living expenses
conservative treatment of debts and credit limits
This means borrowers who feel comfortable with repayments may still be assessed at much higher assumed costs.
What Banks Look At When Calculating Borrowing Capacity
When you apply for a home loan in 2026, lenders assess a combination of factors — not just income.
Income (and How It’s Treated)
Banks assess income differently depending on type:
PAYG salary is generally taken at face value
bonuses, commissions and overtime are usually shaded
casual income often requires long history
self-employed income is assessed conservatively
Two borrowers earning the same amount can have vastly different borrowing power depending on income structure.
Living Expenses
Banks now scrutinise expenses far more closely than in the past.
They look at:
declared household spending
transaction history
lifestyle indicators
minimum living expense benchmarks
Underestimating expenses is one of the most common reasons borrowing capacity is reduced.
Existing Debts (This Is a Big One)
Credit cards, HECS debts and personal loans heavily impact borrowing power.
In 2026:
credit cards are assessed at their limit, not balance
buy-now-pay-later accounts still count
HECS reduces usable income
Even unused credit limits can materially reduce borrowing capacity.
How Much Can Different Borrowers Borrow in 2026?
While every situation is different, borrowing power typically looks like this (very broadly):
single income households: more constrained
dual income households: stronger capacity
borrowers with no consumer debt: significantly higher limits
borrowers with clean structure: materially better outcomes
This is why working with a broker who understands policy differences is critical.
Why Online Borrowing Calculators Are Often Wrong
Most calculators:
assume best-case lender policies
ignore shading on income
underestimate living expenses
don’t factor in credit limits correctly
They are useful for rough guidance — not decision-making.
How to Increase Borrowing Capacity Legally and Safely
In 2026, increasing borrowing power is about structure, not shortcuts.
Common strategies include:
reducing or cancelling unused credit cards
restructuring debts before applying
choosing lenders with favourable income treatment
timing applications correctly
structuring loans to maximise serviceability
These strategies are lender-specific and must be applied carefully.
Borrowing Capacity for First Home Buyers vs Investors
First home buyers and investors are assessed differently.
Investors face:
rental income shading
portfolio exposure limits
stricter loan-to-value rules
This makes upfront structuring even more important for long-term plans.
Location Matters More Than You Think
In 2026, borrowing capacity is affected by:
property location
apartment vs house
postcode concentration rules
lender appetite by city
A borrower buying in Sydney’s Eastern Suburbs may receive different outcomes to someone buying in regional Queensland or Western Australia — even with identical finances.
Why Mortgage Brokers Unlock Higher Borrowing Power
Banks assess one way. Brokers compare many.
A mortgage broker can:
match your profile to the right lender
structure applications for policy alignment
avoid lenders that penalise your situation
plan future borrowing capacity
At Brampton Finance, we focus on sustainable borrowing power, not just approval today.
Final Thoughts: Your Borrowing Power Is Not Fixed
In 2026, borrowing capacity is dynamic. With the right advice, many borrowers can improve their position significantly — without increasing risk.
Understanding how banks calculate borrowing power is the first step toward buying with confidence.
Want to know how much you can really borrow? Brampton Finance provides borrowing capacity assessments Australia-wide, helping buyers understand their true position before making offers.