“How much can I borrow?” will probably be one of the first questions you ask yourself when buying your first home or moving to a larger property for the first time. Many Australian borrowers in 2026 are uncertain about their borrowing power. This is due to lender policy changes and stricter serviceability requirements, and increased attention to the details of living expenses. It means that your borrowing power is likely to be lower than you expected it to be just a few years ago. 

OM Financials assists its clients in navigating the complexities of these changes. It also helps them determine realistic borrowing levels, so they can plan their property journey with confidence.

Why Borrowing Capacity Is Uncertain in 2026

Borrowing power depends on many things. In recent years, banks have become more careful to make sure borrowers can still repay loans if interest rates increase.

Because of this, lenders use serviceability buffers. This means they add extra percentage points to the interest rate to check if you can handle higher repayments. They also look closely at your living expenses, such as daily costs, existing loans, and lifestyle spending.

Lenders also apply income shading, where they assess your income more cautiously. This can lower the amount you are allowed to borrow.

These factors make borrowing capacity Australia 2026 less predictable, so relying on outdated assumptions can lead to disappointment or loan rejections. 

What Determines How Much You Can Borrow?

While each lender has its own method, your borrowing power generally depends on a combination of:

• Income: Full-time, part-time, and other sources of regular income. Lenders will often take a conservative approach to variable income.
• Expenses and debts: All living costs, existing loans, credit card balances, and personal obligations.
• Loan type and term: Fixed or variable rate loans, length of the loan, and whether features like offsets are included.
• Deposit size: A larger deposit can increase borrowing power and potentially avoid Lenders Mortgage Insurance (LMI).

Even small differences in how lenders calculate these factors can affect your borrowing limit, which is why personalised advice is crucial.

How a Home Loan Calculator Australia Can Help

Online calculators can give you a rough estimate of how much you may be able to borrow. They typically ask for your income, expenses, debts, and desired loan term to provide a figure. While useful for budgeting and planning, calculators don’t account for every nuance of lender policy.

At OM Financials, we combine calculator estimates with our deep understanding of lender practices to give you a realistic borrowing assessment. This ensures you don’t overestimate your capacity and face stress or disappointment later in the application process.

You can start with a quick calculation here: home loan calculator Australia. 

Borrowing for First Home Buyers

It’s essential to have realistic expectations when purchasing your first ever home. Although government initiatives like the First Home Guarantee provide an option for assistance on first home loans. And,  serviceability assessments will also be conducted by lenders for all first home loans. Therefore, it is likely that your borrowing capacity will be much less than you are thinking based on your ‘wish-list’ for a home.

First home buyers should prioritise finding an affordable suburb and creating a realistic budget, with professional guidance. It helps them understand how much they will truly be able to borrow without stretching their budget too far.

Borrowing for Upgraders

The amount of money that you can borrow when upgrading to a bigger home depends on many factors, including your income and savings. On the other hand,  it also includes the equity in the property that you’re currently living in. When determining your borrowing capacity, lenders will take into account the mortgage you currently have, any other outstanding debts against your name, and any deposit that you have available to use on a new purchase. 

In certain circumstances, this can limit the borrower’s ability to upgrade. Especially, if they have a high level of personal debt or a high amount of living expenses. With the right professional guidance, you will be able to develop a strategy to optimise your borrowing potential effectively and responsibly. Not only this, but an expert will also let you utilise options such as debt consolidation or splitting loans for better management of repayments.

Why Getting Professional Advice Matters

In 2026, calculating how much you can borrow is more complicated than before. Rules about repayments, living expenses, and income checks keep changing, and it’s easy to get confused.

By speaking with a broker like OM Financials, you get clear benefits:

• Correctly calculating your required borrowings from each lender.  
• Assisting you in assessing the suitable lenders for your financial position.  
• Providing you with creative options to increase your total borrowings without any undue stress. 
• Providing confidence that the loan amount you are applying for is one you can be comfortable with. 

Undertaking the same on your own without proper advice may result in you borrowing too much. Also, it delays receiving your loan approval and, in some cases, being rejected for a loan. Therefore, a professional will assist in simplifying and securing all phases of the process. 

Take the First Step With OM Financials

If you’re ready to find out how much you can borrow for your first home or an upgrade in 2026, OM Financials can help. We provide personalised borrowing assessments and guide you through the entire loan process with clarity and confidence. You can call us today at 0478 876 967 book a free consultation as well.