Borrowing Power Calculator

Your borrowing power is an estimate of how much a New Zealand bank or lender will let you borrow for a mortgage. Luminate’s calculator uses current servicing frameworks to give you an accurate baseline, but understanding how lenders view your profile can help you optimize your application.

Key Factors That Determine Your Borrowing Power

• Gross Household Income: Your base salary or wages. Lenders typically look at regular, verifiable income. If you are self-employed or rely on bonuses, lenders may average your earnings over the last 1–2 years.
• Credit Card and Credit Limits: This is a common trap. Lenders evaluate your credit cards based on their total available limit, not your current balance. A $10,000 credit card limit can reduce your borrowing power by up to $50,000, even if the balance is $0.
• The "Test" Interest Rate: Banks do not calculate your borrowing power using current market interest rates. Instead, they apply a servicing test rate (often 1.5% to 2% higher than current floating rates) to ensure you can still afford payments if rates rise.
• Living Expenses: Under standard lending criteria, banks categorize your expenses into fixed costs (rates, insurance, child care) and discretionary spending to calculate your Uncommitted Monthly Income (UMI).