Buying a home in North Shore Sydney is a major milestone, but oftentimes, knowing how much you can borrow is where most borrowers hit a wall. This question matters because your borrowing power defines your budget and your home search. 

Many first-home buyers and even seasoned investors mistakenly think it's all about income alone. But in reality, lenders assess a range of factors, and one misstep in your financial profile could reduce your loan size significantly. That’s where a mortgage broker comes in. 

An experienced North Shore Sydney broker, like Sabea Financial, can help you understand lender policies, assess your borrowing capacity, and structure your application effectively, ensuring a smoother loan experience. 

Here’s what you need to know to calculate how much you can borrow for a home loan in 2026.

How Much Can I Borrow for a Home Loan?

How much you can borrow for a home loan depends on factors such as your income, living expenses, existing debts, deposit size, and current lender serviceability rules. Lenders use this information to calculate your borrowing power, which determines the maximum loan amount you may be eligible for before applying for pre-approval.

What Factors Affect How Much You Can Borrow in North Shore Sydney?

Lenders don’t just look at your salary. They take a much deeper dive into your financial situation. Here's what typically influences your borrowing capacity in 2026:

Income Type and Stability

Whether you're on a salary, contract, or self-employed, your income source and history impact how lenders assess you. A steady PAYG income with at least six months of employment is usually favoured, while self-employed borrowers may need two years of financials.

Monthly Living Expenses

Lenders review your declared household expenses, from groceries and transport to school fees and streaming subscriptions. They also compare this to the Household Expenditure Measure (HEM) to flag inconsistencies.

Current Debts and Liabilities

Car loans, credit cards, personal loans, Buy Now Pay Later accounts, they all chip away at your borrowing power. Even unused credit limits can count against you, so reducing or cancelling unused cards can help.

Credit Score and History

While not every lender uses credit scores the same way, a strong credit history (with no recent defaults or payday loans) generally supports your application.

Loan Term and Interest Rate

The interest rate affects how much you’ll repay each month. The higher the rate, the lower your borrowing power, especially with lender stress tests applying an interest buffer (typically +3%).

Dependents and Marital Status

Having children increases your ongoing living costs. Lenders take this into account, which can reduce your assessed surplus income.

Steps to Calculate Your Borrowing Power in 2026

1. Add Up Your Gross Income

Include base salary, overtime, bonuses, rental income, and any government payments if applicable.

2. List Your Monthly Living Expenses

Be honest and thorough, think food, utilities, childcare, subscriptions, insurance, transport, etc.

3. Tally Your Liabilities

Include car loans, HECS/HELP debt, credit card limits (not balances), BNPL accounts, personal loans, everything.

4. Apply a Stress-Tested Rate

Use a mortgage calculator with a 3% interest buffer (e.g., if rates are 6%, test at 9%). Estimate what loan amount you could service with your surplus income.

Bonus Tip: Work with a mortgage broker who can run a personalised serviceability assessment using actual lender calculators.

What Are Common Mistakes Borrowers Make with Borrowing Capacity?

Many borrowers assume income alone determines borrowing power, but this often leads to disappointment. Here are some common pitfalls:

• Underestimating their real expenses or failing to update budgets after lifestyle changes
• Keeping high credit limits open, even on unused cards, which reduces available loan size
• Applying to the wrong lenders who aren’t suited to their income type or structure
• Ignoring their credit report, missing errors or defaults that hurt their assessment
• Relying on online calculators instead of verified lender tools

Understanding lender expectations is key. That’s why tailored advice saves time and avoids rejection.

How Mortgage Brokers Help Homebuyers Calculate Borrowing Power

Mortgage brokers play a crucial role in demystifying borrowing capacity. Rather than relying on rough estimates or risking a failed application, brokers match you to lenders that suit your profile. Here's how:

• Interpret complex lender policies: Every bank treats income, debts, and expenses differently — brokers understand these nuances.
• Structure your application for maximum borrowing power: They help reduce liabilities, choose the right product, and present your financials effectively.
• Avoid unnecessary hits to your credit file by recommending lenders with high approval potential.

At Sabea Financial, our North Shore Sydney mortgage broker team supports clients from start to finish, from calculating borrowing capacity to securing home loan pre-approval. We tailor strategies to your goals and ensure your loan application meets lender expectations.

Need help figuring out how much you can borrow for your home loan? Contact Sabea Financial today to get started.

FAQs 

How do lenders calculate how much I can borrow?

Lenders calculate borrowing power by comparing your income against your expenses, debts, and dependents. They also stress test your repayments at higher interest rates to assess affordability.

Can I increase my borrowing power?

Yes, you can improve borrowing power by reducing debts, increasing income, cutting expenses, and removing unused credit limits. A broker can also match you with lenders offering better serviceability terms.

Do online borrowing calculators give accurate results?

Not entirely. They provide a general idea, but don’t factor in individual lender policies, buffers, or your full financial profile. Broker tools are far more precise.

Will having children reduce my borrowing power?

Yes, dependents increase your estimated living expenses, which can lower the amount you’re eligible to borrow. Lenders assess this based on your household composition.

Does my credit score affect borrowing power in Australia?

Yes, while credit scores don’t directly limit loan size, a poor credit history can lead to rejection or stricter terms. Lenders assess your credit conduct during serviceability checks.

How much can I borrow on a $100,000 salary in 2026?

It depends on your expenses, debts, and dependents. On average, you might borrow between $500,000 to $700,000, but exact figures vary by lender and profile.

Should I get pre-approval before house hunting?

Yes, getting pre-approval helps confirm how much you can borrow and sets your buying budget. It also strengthens your position when making offers.

Final Thoughts

Understanding how much you can borrow is the foundation of a successful home-buying journey, especially in a competitive market like North Shore Sydney. Your borrowing power affects the properties you can consider, the lenders you qualify for, and the terms of your loan. With so many variables in play, it’s smart to seek professional support. 

A mortgage broker doesn’t just estimate your loan amount; they refine your financial profile and give you a real shot at approval. The trusted North Shore Sydney mortgage brokers at Sabea Financial are ready to help.

To speak with a lending expert, call 1300 001 755 today.



External Resources

• https://www.moneysmart.gov.au/home-loans
• https://www.apra.gov.au
• https://www.servicesaustralia.gov.au