Methodology & Assumptions

The model estimates available monthly servicing capacity using assessable income, household expenses and existing financial commitments.

That monthly servicing capacity is converted into an indicative principal amount using an assessment interest rate and selected loan term.

The model applies a serviceability buffer above the estimated market interest rate and also maintains a minimum assessment-rate assumption.

Actual lenders may use different assessment rates and buffers.

Base employment income is generally treated separately from variable income such as overtime, bonuses and commissions.

Variable income may be discounted for modelling purposes because lenders often require evidence of consistency and may not accept all variable earnings.

Actual lender treatment varies according to income type, history, occupation and verification evidence.

The calculator converts assessable gross income into an estimated net monthly income using modelled Australian income-tax and Medicare assumptions.

These calculations are estimates and are not tax advice or a substitute for an individual's actual tax position.

The model compares user-entered household expenses with an internal minimum living-expense benchmark.

Where entered expenses fall below the benchmark, the benchmark may be used instead. Actual lenders may use different benchmarks, verification processes and expense categories.

Dependants form part of the model's household-expense assessment. Lenders may assess dependants differently and may incorporate additional household expenditure benchmarks.

Credit cards are assessed using the available credit limit rather than only the current balance because lenders commonly allow for the potential repayment obligation associated with the limit.

Car loans, personal loans, existing home loans, student debt, buy-now-pay-later commitments and other entered liabilities are incorporated into the monthly serviceability assessment.

Actual lender treatment may differ by liability type.

In addition to a central borrowing estimate, the service displays an indicative range.

The range is intentionally wider on the conservative side to recognise that lender calculators and credit policies can produce lower outcomes for the same borrower.

It is not intended to represent the guaranteed minimum and maximum amounts available in the lending market.

The estimated loan required is calculated using the property value, estimated purchase costs, user contribution and eligible modelled cash assistance.

Where applicable, an indicative Lenders Mortgage Insurance planning allowance may also be included.

The loan-to-value ratio is estimated by comparing the relevant loan amount with the entered property value.

LVR can affect rate assumptions, LMI and lender policy.

Purchase-cost estimates include modelled transfer duty and planning allowances for transaction costs such as registration and conveyancing.

Actual costs should always be independently verified.

The calculator models potential first-home cash grants and duty concessions separately.

Cash grants are treated as potential funds available toward the transaction, while duty concessions are treated as reductions in purchase costs.

Eligibility is not determined conclusively by the calculator.

The scenario simulator recalculates the model after selected assumptions are changed.

Examples include reducing credit-card limits, repaying debts, changing household expenses, increasing income or contribution, or changing the loan term.

Scenario results are educational projections rather than recommendations.

The model may be tested against publicly available lender calculators and representative borrower scenarios to assess whether its outputs fall within a reasonable market range.

Such testing does not mean the model reproduces, represents or is endorsed by any particular lender.

No generic calculator can fully reproduce a lender's proprietary credit assessment.

Important factors that may cause actual outcomes to differ include credit history, lender-specific policy, income verification, employment history, property type, loan product, borrower age, loan term, interest-rate changes and information not captured by the calculator.

State and territory grants, concessions, thresholds and duty rules are subject to change.

The model should therefore be periodically reviewed against official government sources.

Calculation assumptions should be reviewed periodically as lender practices, interest-rate environments, taxation rules and government programs change.