Construction Loan Borrowing Power Calculator
Estimate your maximum construction loan based on income, expenses and existing debt. Lenders assess you at your contract rate plus APRA's 3% buffer — this calculator uses that same assessment rate to give you a realistic number.
Your Financial Profile
~$3,200/mo (HEM benchmark)
Car loan, credit card min, HECS, personal loan
How lenders assess construction loans
Construction loan assessment is similar to standard mortgages, but with one key difference: lenders assess your ability to repay at completion — based on the total loan (land + build), not just the land portion.
APRA's serviceability buffer
Since 2021, APRA (Australian Prudential Regulation Authority) requires all lenders to assess borrowers at their contract rate plus 3%. If your rate is 6.5%, you're assessed at 9.5%. This buffer ensures you can still afford repayments if rates rise.
HEM benchmarks
Lenders use the Household Expenditure Measure (HEM) — compiled by the Melbourne Institute — as a floor for living expenses. If your declared expenses are below HEM, lenders use HEM instead. This calculator uses approximate HEM values as published by the Melbourne Institute.
What increases your borrowing power
- Lower existing debt obligations (pay off car loans, reduce credit card limits)
- Joint application with a second income
- Lenders with more generous assessment methods (a broker can find these)
- Longer loan terms (30 years gives more borrowing power than 25)
Related calculators
Uses APRA serviceability buffer of +3% per APG 223. HEM benchmarks approximate from Melbourne Institute data. After-tax income uses a simplified flat-rate approximation — actual tax varies. This is an estimate only. Actual borrowing capacity depends on your full credit file, declared expenses and individual lender policies.