Why does borrowing capacity differ between banks?

Every lender uses different income shading rules, expense benchmarks, HECS treatment, assessment rates, DTI caps and employment requirements. These variations cause large differences in borrowing power, even for the same income level.

How can I increase my borrowing power?

You can increase borrowing power by reducing credit card limits, paying off car or personal loans, lowering expenses, improving savings patterns, waiting until probation ends and choosing a lender whose calculator favours your income type. Matcheroo AI helps identify these lenders.

How Much Can I Borrow on My Income in Australia?

Q: How much can I borrow on my income in Australia?

Borrowing power in Australia depends on your income, debts, HECS, living expenses, dependants, credit score and how each bank calculates serviceability. Different banks may offer borrowing limits that vary by $50,000 to $200,000 or more. Matcheroo AI compares these differences to show where you can borrow the most.

One of the most common questions Australian home buyers ask is:
“How much can I borrow on my income?”

The answer varies massively between banks because every Australian lender uses a different borrowing-capacity calculator, different income rules, different expense assumptions and different credit policies. This is why two banks can offer borrowing limits that differ by $50,000–$200,000+ for the exact same income.

Whether you’re buying in Sydney, Melbourne, Brisbane, Perth, Adelaide or regional Australia, your income is the starting point — but lenders also analyse debts, HECS, credit score, dependants, living expenses and the type of income you earn.

This page explains how much you can borrow on your income in Australia, what affects your borrowing power the most, and how Matcheroo AI helps identify which lenders will offer the highest borrowing capacity for your income level.

How Borrowing Capacity Is Calculated From Your Income

Banks begin with your gross income, then apply lender-specific rules to determine how much of that income they will count toward your borrowing capacity.

Here’s how lenders assess income across Australia:

1. Full-Time Income

Full-time PAYG income usually receives the highest borrowing capacity because it is stable and predictable. Most banks accept 100% of:

Base salary
Contracted hours
Permanent employment income

2. Part-Time Income

Banks accept most part-time income if hours are consistent. However, some lenders require:

A minimum number of hours each week
A stable history of part-time work
No large fluctuations in pay

3. Casual Income

Casual income is where banks differ the most.

Some lenders accept:

100% of casual income after 3–6 months

Others accept:

Only 50–80% of casual income
Require 12 months of continuous employment
Require long-term industry experience

This can change borrowing power by tens of thousands.

4. Overtime, Bonus and Commission Income

Banks apply “shading” to variable income:

Overtime: accepted 50–100%, averaged over 3–24 months
Bonuses: averaged over 6–24 months
Commission: heavily discounted by some lenders

Borrowers in trades, mining, emergency services, healthcare, construction and hospitality often see major differences between lenders.

5. Self-Employed Income

Self-employed borrowers must provide:

Tax returns
Notices of Assessment
Business financials

Income is usually averaged over two years, although some lenders accept one year if income has increased.

How Much You Can Borrow on Your Income (General Estimates)

These are typical nationwide ranges, but every lender is different.

Exact numbers depend on debts, HECS, credit score, dependants and spending.

Income: $60,000 per year

Borrowing capacity: $350k–$450k

Income: $80,000 per year

Borrowing capacity: $450k–$550k

Income: $100,000 per year

Borrowing capacity: $550k–$650k

Income: $120,000 per year

Borrowing capacity: $650k–$750k

Income: $150,000 per year

Borrowing capacity: $750k–$900k+

Income: $200,000 per year

Borrowing capacity: $1M–$1.2M+

These are wide ranges because lenders use completely different formulas.

Some banks may approve $200,000 more than others for the same income.

What Reduces Your Borrowing Capacity (Even With High Income)

Lenders do not look at income alone. Borrowing power can collapse if:

You have high credit card limits
You have car loans or personal loans
You have HECS/HELP debt
You have dependants
Your living expenses are high
You have unstable income
Your credit score is lower than expected
You use Buy Now Pay Later
Your spending patterns exceed benchmarks

Even borrowers earning $150,000–$200,000 can fail borrowing capacity tests due to debts or spending behaviour.

Why Borrowing Power Differs by $50,000–$200,000 Between Banks

Australian lenders use different:

Income shading rules
Expense benchmarks
HECS calculations
Interest rate buffers
Credit score thresholds
DTI (Debt-to-Income) caps
Rental income rules
Treatment of bonuses and overtime
Acceptable employment types

This is why someone earning $100k might borrow:

$550k with Lender A
$650k with Lender B
$720k with Lender C

The borrower didn’t change.

The bank policy changed.

This is exactly why Matcheroo AI was built.

How Matcheroo AI Helps You Discover Your TRUE Borrowing Capacity

Matcheroo AI compares your income, debts, spending and profile across multiple Australian lenders to show:

Where your borrowing power is highest
Which banks accept your income type
Which lenders treat HECS more gently
Which lenders have lower expense assumptions
Where rental income is shaded less
Which banks allow higher DTI ratios
Where your employment scenario fits best

This often reveals borrowing differences of $50,000–$180,000+ between lenders — even for the same income.

How to Increase Borrowing Capacity on Your Income

Australians can quickly increase borrowing power by:

Reducing credit card limits
Paying off car loans or personal loans
Removing BNPL accounts
Lowering discretionary expenses
Improving savings patterns
Waiting until probation ends
Cleaning up credit reports
Choosing a lender whose calculator suits their income

Most borrowers do not have an income problem — they have a lender mismatch problem.

Summary: How Much You Can Borrow on Your Income in Australia

How much you can borrow depends on:

Your income
How stable your income is
How the lender treats your income type
Your debts
Your HECS
Your spending behaviour
Your dependants
Your DTI ratio
The bank’s internal calculator

Two banks may differ by $200,000+ in how much they will lend on the same income.

Matcheroo AI identifies which bank will give you the highest borrowing capacity based on your income and financial profile.

MATCHEROO.AI