How Much Can You Borrow on a $100k Salary?

The short answer

On a $100,000 gross salary with no other debts and modest living expenses, a single borrower in Australia can typically borrow roughly $450,000 to $550,000 for a home loan in the 2025-26 financial year. The exact figure depends on the lender's assessment rate (your rate plus a 3% buffer, as required by APRA), your living expenses, your deposit, and any other debts like car loans or credit-card limits. True Loan doesn't run a lender's serviceability test, but it shows you exactly what the repayments on any loan size would be, so you can check whether a borrowed amount is comfortable.

How borrowing capacity works in Australia

Lenders don't lend off your salary directly. They work out your monthly surplus (income after tax, living expenses and existing debts) and lend the amount whose repayment fits inside that surplus. The key Australian mechanics:

• The 3% serviceability buffer. Banks must assess you at an interest rate at least 3 percentage points above the actual loan rate (APRA). So if the offered rate is 6%, they test whether you could afford repayments at ~9%. This is the single biggest reason borrowing power is lower than a naive "salary x 5" estimate.
• Living expenses (HEM). Lenders compare your declared expenses to the Household Expenditure Measure benchmark and use whichever is higher.
• Existing debts. Car loans, HECS/HELP, and even unused credit-card limits cut your capacity. A $10,000 card limit can reduce borrowing power by tens of thousands.
• Deposit and LMI. A bigger deposit means a smaller loan and a lower LVR. Above 80% LVR you'll usually pay Lenders Mortgage Insurance (LMI), unless you qualify for the First Home Guarantee, which lets eligible first home buyers buy with as little as a 5% deposit and no LMI (from 1 October 2025: no place limits, no income caps, and higher price caps such as $1.5m in Sydney).

Moneysmart has a borrowing-power calculator that applies these rules.

Worked example

Take a single borrower on $100,000 gross:

Item	Amount (monthly)
Gross salary	$8,333
Income tax (approx.)	-$1,820
Net income	~$6,513
Living expenses (HEM-style)	-$2,300
Other debt repayments	$0
Available for loan repayment	~$4,200

Now apply the buffer. If a lender tests at ~9% (6% rate + 3% buffer) over 30 years, a repayment of ~$4,200/month supports a loan of roughly $520,000. That's the assessment figure: the loan they'll approve.

Your actual repayments are charged at the real rate, not the buffered one. A $500,000 loan at 6% over 30 years (monthly, P&I) costs about $2,998/month. For comparison, True Loan's standard example (a $600,000 loan at 6% over 30 years) is ~$3,597/month. So the gap between what you can borrow and what's comfortable is real, and worth modelling.

If you borrowed $520k on, say, a $550k purchase, your deposit would be ~$30k (a ~95% LVR), which means either LMI or qualifying for the First Home Guarantee.

Model this in True Loan

True Loan won't tell you your bank-approved limit, but it does tell you the thing that matters day to day: what the repayments and total cost are. That lets you sanity-check any borrowing figure against your real budget. Open the True Loan calculator and:

1. Set Loan amount to the figure you're considering (e.g. $500,000).
2. Set Interest rate to a realistic rate (e.g. 6%) and Term to 30 years.
3. Set Repayment frequency (monthly/fortnightly/weekly) and P&I.
4. Add an Offset balance in the dedicated Offset input if you'll keep savings in an offset account, or an amount in the Extra repayment ($/month) input if you'll pay extra. These are two separate inputs.
5. Use the upfront costs panel to add your deposit, stamp duty (all states, with first-home-buyer concessions) and an LMI estimate, to see total funds needed at settlement.

Then compare two scenarios side by side, for example $450k vs $550k, to see how much each adds to your monthly repayment before you commit.

Related: What is the 3% serviceability buffer? · How much does a credit-card limit reduce borrowing power? · First Home Guarantee: 5% deposit repayments.

Common questions and mistakes

• "$100k salary x 5 = $500k, right?" It's a rough ballpark, but multipliers ignore the 3% buffer, your expenses, and other debts. Two people on $100k can have very different limits.
• Does a credit card hurt even if it's empty? Yes. Lenders assess against the limit, not the balance, so lowering or closing cards can lift capacity.
• Is the assessment rate what I'll actually pay? No. You're tested at rate + 3%, but charged the real rate. Budget on the real rate.
• Can I borrow more with a guarantor or the First Home Guarantee? A guarantee can remove LMI and let you borrow with a smaller deposit, but it doesn't change the serviceability surplus test.
• Does HECS/HELP count? Yes, it's treated as an ongoing commitment and reduces your surplus.

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Figures here are general estimates for the 2025-26 financial year, not financial or credit advice. Your actual borrowing capacity is set by a lender. Check official sources, APRA, Moneysmart, Housing Australia and the ATO, and speak to a licensed broker or lender for advice specific to you.