Test a household cash-flow scenario
This planning tool starts with after-tax household income and subtracts listed living costs and ongoing commitments. It then reserves part of the remaining cash flow before translating the balance into a loan-capacity scenario at an assessment rate.
It is deliberately not a borrowing approval calculator. Australian lenders use their own credit policies, verified income, expense benchmarks, dependants, liabilities, buffers and property assessment processes. A result can therefore be higher or lower than an amount considered by any particular lender. It should be revisited when income, housing costs, credit commitments or household circumstances change.
How to read the results
Planning loan capacity is the present value of the modelled monthly capacity over the selected term at the assessment rate. It is labelled as a scenario amount because it is not a credit decision or an indication of lender approval.
Before reserve is income less entered expenses and commitments. Monthly capacity is the amount left after the selected reserve percentage. The chart shows how the same payment capacity supports different loan horizons. Reviewing a lower income or higher expense scenario can also reveal how sensitive the planning amount is to everyday changes.
Worked example
The default inputs are $9,500 monthly after-tax income, $5,200 living expenses, $850 commitments, a 20% reserve, a 9.34% assessment rate and 30 years. That leaves $3,450 before the reserve and $2,760 monthly capacity after it.
At those assumptions, the planning loan capacity is about $332,849. It is a sensitivity exercise only; it does not account for an individual lender’s serviceability method or maximum loan-to-value ratio.
Assumptions and limitations
- Income, expenses and commitments are treated as constant monthly amounts.
- The reserve percentage is applied to the cash flow remaining after listed expenses and commitments.
- The assessment rate is constant for the full selected loan term.
- The model assumes a principal-and-interest repayment structure.
- Tax changes, dependants, credit history, assets, property value and lender policy are not assessed.
Frequently asked questions
Is this a pre-approval?
No. Only a lender can make a lending decision after its application, verification and credit assessment processes.
Should I enter gross or net income?
Enter monthly after-tax household income, consistent with the field label, and include only income you consider reliable for planning.
Why use an assessment rate?
It tests repayments at a stated higher rate, but each lender chooses its own servicing assumptions and buffers.
This calculator and supporting information provide general estimates only. They do not take account of every product rule, tax consequence or personal circumstance and are not financial, tax, credit or legal advice.