Borrowing Capacity Calculator Bendigo Bank

Bendigo Max Calculation Formula:

\[ \text{Borrowing Capacity} = (\text{Net Monthly Income} - \text{Monthly Expenses}) \times \text{Affordability Ratio} \times 0.97 \ (\text{3\% Buffer}) \]

Estimated Borrowing Capacity (Bendigo Max):

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1. What is Bendigo Max?

Bendigo Max is Bendigo Bank's borrowing capacity calculation that determines the maximum loan amount a customer can afford based on their income, expenses, and the bank's lending criteria, including a 3% buffer for financial safety.

2. How Does the Calculator Work?

The calculator uses the Bendigo Max formula:

\[ \text{Borrowing Capacity} = (\text{Net Monthly Income} - \text{Monthly Expenses}) \times \text{Affordability Ratio} \times 0.97 \]

Where:

\( \text{Net Monthly Income} \) — Income after tax and deductions
\( \text{Monthly Expenses} \) — All regular monthly financial commitments
\( \text{Affordability Ratio} \) — Bank's assessment ratio (typically 0.3)
\( 0.97 \) — 3% buffer as per Bendigo Bank policy

Explanation: The calculation ensures borrowers can comfortably manage repayments even with interest rate fluctuations or income changes.

3. Importance of Borrowing Capacity Calculation

Details: Accurate borrowing capacity assessment is crucial for responsible lending, ensuring customers don't overextend themselves financially while maximizing their home buying potential.

4. Using the Calculator

Tips: Enter accurate net monthly income and all regular expenses. Use the standard affordability ratio of 0.3 unless advised otherwise by Bendigo Bank. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does Bendigo Bank use a 3% buffer?
A: The 3% buffer is a prudential measure to ensure borrowers can withstand potential interest rate increases or income changes without financial stress.

Q2: What is included in monthly expenses?
A: All regular financial commitments including existing loan repayments, credit card limits, living expenses, and other ongoing financial obligations.

Q3: How often should I reassess my borrowing capacity?
A: Whenever your financial situation changes significantly - after a pay raise, job change, or when taking on new financial commitments.

Q4: Does this calculation guarantee loan approval?
A: No, this is an estimate only. Final approval depends on Bendigo Bank's full assessment including credit history, property valuation, and other factors.

Q5: Can I increase my borrowing capacity?
A: Yes, by reducing expenses, increasing income, paying down existing debt, or improving your credit score.