The APRA Borrowing Capacity Stress-Test Calculator is a home lending simulator designed to help Australian homebuyers estimate their maximum borrowing limit under strict banking regulations.

When you apply for a home loan in Australia, lenders do not evaluate your serviceability based on the current market interest rate. Instead, under guidelines enforced by the Australian Prudential Regulation Authority (APRA), banks must apply a mandatory interest rate serviceability buffer of +3.0%. This means that if you secure a home loan at a market rate of 6.2%, the bank's stress-testing algorithm evaluates your ability to make repayments at a theoretical rate of 9.2%.

Lenders calculate your borrowing capacity through a rigorous review of your household cash flow:

• Net Taxable Income: Your combined household income after tax.

• Basic Living Expenses: Lenders use either your actual declared monthly living expenses or the Household Expenditure Measure (HEM) benchmark (whichever is higher) to estimate your baseline costs.

• Existing Debts: Ongoing repayments for car loans, personal loans, and student loans (HECS/HELP) reduce your cash surplus. Credit card limits are factored into your serviceability at approximately 3% of the limit monthly, regardless of whether the card has a balance.

• Debt-to-Income (DTI) Cap: Banks typically cap your total loan amount at 6 times your gross annual income to limit credit risk.

This borrowing power simulator applies the 3.0% APRA stress buffer, accounts for your living expenses and credit obligations, and estimates your maximum loan amount under standard bank serviceability guidelines.

1. Input Gross Annual household Income. 2. Set monthly household expenses and debt repayments. 3. Input current mortgage interest rate. 4. View your estimated borrowing capacity and real monthly payments.