CCH "How much can I borrow?" Calculator Help
The CCH "How much can I borrow?" Calculator estimates the home loan amount that you can afford, based on the amount of repayments that you feel you can make. If you know how much you are willing and able to repay, this calculator will translate that information into the loan amount that the repayments can support -- at various interest rates, loan terms and payment frequencies.
Of course, this calculator provides only a rough guide to get you started on your home quest. Lending institutions will have their own criteria for estimating how much you can afford to repay, including a review of your income and expense profile. They will also have lending criteria based on the appraised value of the property you wish to buy. The lending institution's loan limit may be higher or lower than the results generated by this calculator, depending on the actual property and how conservative you are in estimating your repayment capacity.
The calculator assumes a normal "principal and interest" loan, which will be fully repaid over the period (not an "interest only" loan).
Enter the annual interest rate that you feel is appropriate to your circumstances. The calculator assumes that this rate will apply throughout the life of the loan. However, many home loans have variable rates that change from time to time. If you are considering a variable rate loan, you should use an interest rate that reflects the likely average rate over the period of your loan. This is particularly important if you are considering a loan that has a special low rate for an initial period.
You can also experiment with a range of rates to see what a change in rates would do to your borrowing capacity. It is understood that some lending institutions make their calculations using an interest rate 2% above the current interest rate, in order to provide a buffer. You may wish to adopt a similar approach.
A sample rate is displayed by default. This is to show the format of the data to be entered; it is not a suggested value.
Select the payment frequency (per week, fortnight or month) from the drop-down window, and enter the amount that you are willing and able to repay per payment period. You may want to prepare a budget of your income and expenses, to arrive at this figure. You will normally need to list your income and expenses for your loan application, at any rate. Another approach is to use your current rental payments as a basic guide to your repayment capacity, adjusting downward to allow for home ownership expenses (eg rates, maintenance, and insurance) and adjusting upward to reflect your current capacity to save.
The maximum loan term would generally be 25 to 30 years, depending on the institution. However, you may wish to use a shorter period. Use the nearest single decimal for a partial year, eg 24 years 6 months = 24.5 years.
This is the estimated loan amount that can be fully repaid over the loan term based on the repayment amount, repayment frequency and annual interest rate that you provide.
To print the results, click on the "Printer Friendly Version" link, then select "File", "Print", from your browser menu on the printable report screen. (The reason for generating a separate printable report is that some browser versions will otherwise print the default values.)
For more information on planning your financial future and appropriate investments, see your financial adviser.
CCH publishes information for professionals on financial planning, superannuation and taxation, including:
Electronic products
CCH Financial Planning Navigator
CCH Electronic Superannuation Library
Australian Electronic Master Tax Guide
Australian Master Superannuation Guide
CCH Electronic Tax Library
CCH Accountants Tax and Business Series
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Australian Master Tax Guide (annual book)
Australian Master Financial Planning Guide (annual book)
Australian Master Superannuation Guide (annual book)
CCH Australian Superannuation Law and Practice (looseleaf subscription)
Hands on Solutions: Superannuation (looseleaf subscription)
Hands on Guide: Financial Planning (looseleaf subscription)
This calculator is made available by CCH for use subject to the following:
the calculator (including its help file) provides general information without taking account of the particular circumstances of any individual;
it is not, and should not be relied on as, a substitute for appropriate professional advice;
CCH gives no assurance that the calculator is free of errors or suitable for any user’s intended purposes;
to the extent permitted by law, CCH will not be liable for any damages or loss suffered by the user or anyone else from use of the calculator.
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