Your Income Details     Your Expense Details    
  Joint Income  
Your estimated of Annual Expenses $  
  Number of Dependents    Use Gov't Household Expenses Value 
  Net After Tax Income 1   HEM Value Yearly  
   
  Monthly Car Loan Repayment $  
  Net After Tax Income 2   Monthly Credit Card Repayment $  
   
  Other Monthly Payment $  
  Other Net Income          
   
         
  Maximum Percentage of Income Available          
  Use Bank Default
       
  0.85              
  Your Loan Details       Results      
  Annual Interest Rate   Maximum Amount You can Borrow  
  Your Interest Rate Buffer   Monthly Repayment  
  Use Default Buffer Rate of 1.5%
Total Payments  
  Loan Terms -years   Total Interest Paid  
                 
  0.015              
                 
  Borrowing Power Calculator Assumptions
The Borrowing Power Calculator calculates the maximum amount of home loan you can borrow based on the income and expenses entered. Default values are provided as examples.
           
Expense Details and Default Values
a) Default annual expense - borrower assumed to have core level of annual expense, depending on whether single or joint and the number of dependants, currently as below:
  Number of dependants Single Joint    
0 $13,200 $24,000
1 $16,800 $26,400
2 $21,600 $32,400
3 $22,800 $36,000
4 $25,200 $38,400
5 $26,400 $42,000
6 $28,800 $44,400
7 $31,200 $46,800
8 $33,600 $49,200
9 $36,000 $51,600
10 $38,400 $54,000
c) Maximum percentage of income available - percentage of income available for paying expenses and servicing proposed borrowing, default currently set at 85%.
Loan Details
a) Interest rate buffer - calculator uses a higher interest rate (the rate entered by user plus the interest rate buffer) when determining maximum amount that can be borrowed. This allows for affordability of possible rate increases under the loan. Current version of the calculator uses an interest rate buffer of 1.5%.
b) Rounding rules for amount of loan - the calculator rounds the maximum loan amount down to the lower $1,000. For example, if the amount is $250,123, it will be shown as $250,000. Note that the amount of loan is calculated using the interest rate entered, plus any interest rate buffer, and then the resulting loan amount is rounded as required.
c) Interest rate for loan repayment - monthly repayment is calculated in respect of the rounded loan amount and using interest rate entered, not including any interest rate buffer.
Length of Month
All months are assumed to be of equal length. In reality, many loans accrue on a daily basis leading to a varying number of days’ interest dependent on the number of days in the particular month.
Number of Weeks & Fortnights in a Year
One year is assumed to contain exactly 52 weeks or 26 fortnights. This implicitly assumes that a year has 364 days rather than the actual 365 or 366.