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Macquarie Max Formula:
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Macquarie Max represents the maximum borrowing capacity calculated by Macquarie Bank based on your income and their buffered interest rate. This helps potential borrowers understand how much they might be able to borrow from the bank.
The calculator uses the Macquarie Max formula:
Where:
Explanation: This formula calculates the maximum borrowing capacity by dividing your annual income by the bank's buffered interest rate (converted from percentage to decimal).
Details: Understanding your borrowing capacity is crucial for financial planning, especially when considering major purchases like property. It helps set realistic expectations before applying for loans.
Tips: Enter your annual income in AUD and the current Macquarie Buffered Rate as a percentage. Both values must be positive numbers to calculate an accurate result.
Q1: What is a buffered rate?
A: A buffered rate is an interest rate used by lenders that includes a buffer above the actual loan rate to assess borrowing capacity under potential future rate increases.
Q2: Is this calculation definitive for loan approval?
A: No, this is an estimate only. Actual loan approval depends on multiple factors including credit history, expenses, existing debts, and the lender's specific policies.
Q3: How often does Macquarie update their buffered rate?
A: Lenders typically review and update their assessment rates periodically based on market conditions and regulatory requirements.
Q4: Does this calculation include other financial commitments?
A: This simplified calculation doesn't account for other financial commitments. Actual borrowing capacity assessments consider all regular expenses and existing debts.
Q5: Can I use this calculator for other lenders?
A: While the concept is similar, different lenders use varying assessment rates and criteria. This calculator is specifically designed for Macquarie Bank's methodology.