Know your numbers
before you start.

Description

This calculator helps you work out what your regular repayments will be based on your loan amount. The repayment frequency can be changed to monthly, fortnightly or weekly. Calculates both Principal and Interest repayments for a loan term.

Assumptions

• It does not take into account any possible up-front fees. Only ongoing fees are used, not upfront or end-of-loan fees (i.e. discharge costs).
• Interest rate does not change over the loan term.
• Interest is calculated by compounding on the same repayment frequency selected, i.e. weekly, fortnightly, monthly. In practice, the interest compounding frequency may not be the same as the repayment frequency.
• It is assumed that a year consists of 26 fortnights or 52 weeks, which is counted as 364 days rather than 365 or 366 days.
• No rounding is done throughout the calculation, whereas repayments are rounded to at least the nearest cent in practice.

Description

This calculator is designed to give you an estimate of how much money you can borrow from a lender. Note that borrowing power is calculated on a custom model which can differ from lender to lender. The purpose of this calculator is to give an indication of what a lender could offer you, based on some of your basic incomes and financial commitments. You’ll only know how much you can borrow for certain when you apply and receive conditional approval for a maximum borrowing amount on a loan.

Assumptions

• It does not take into account any possible fees, i.e. up-front fees or ongoing fees.
• Interest rate does not change over the loan term.
• Interest is calculated by compounding on the same repayment frequency selected, i.e. weekly, fortnightly, monthly. In practice, the interest compounding frequency may not be the same as the repayment frequency.
• It is assumed that a year consists of 26 fortnights or 52 weeks, which is counted as 364 days rather than 365 or 366 days.
• No rounding is done throughout the calculation, whereas repayments are rounded to at least the nearest cent in practice.
• Buffer or extra interest rate: in order to avoid the risk of interest increasing, many lenders apply a buffer or extra interest rate to calculate borrowing power, but the repayments and total interest payable are still calculated without the buffer rate.
• The borrowing power total is calculated at the greater of the interest rate input plus a buffer of 3%, or a fixed floor rate of 5.75%.
• The greater of the estimated living expenses input, or a default Household Expenditure Measure amount which is implemented in many lenders’ serviceability calculations, is used to calculate the borrowing power amount. The benchmark varies with household type and number of dependants.
• Total credit card limits are assessed as a monthly commitment of 3.8% of the approved limit, regardless of the balance owing.

Rates & Thresholds