Borrowing Capacity Calculator Nab

NAB Borrowing Power Formula:

\[ \text{Borrowing Power} = \frac{(\text{Net Income} - \text{Expenses})}{(\text{NAB Assessment Rate} / 12)} \]

NAB Borrowing Power (AUD):

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1. What is the NAB Borrowing Power Calculator?

The NAB Borrowing Power Calculator estimates how much you may be able to borrow for a home loan based on your financial situation. It uses NAB's assessment criteria including their standard assessment rate to determine your borrowing capacity.

2. How Does the Calculator Work?

The calculator uses the NAB borrowing power formula:

\[ \text{Borrowing Power} = \frac{(\text{Net Income} - \text{Expenses})}{(\text{NAB Assessment Rate} / 12)} \]

Where:

\( \text{Net Income} \) — Your after-tax monthly income (AUD)
\( \text{Expenses} \) — Your total monthly expenses (AUD)
\( \text{NAB Assessment Rate} \) — NAB's current assessment interest rate (% p.a.)

Explanation: This calculation determines how much you could potentially borrow based on your disposable income and NAB's assessment criteria.

3. Importance of Borrowing Power Calculation

Details: Understanding your borrowing capacity helps you set realistic expectations when house hunting, ensures you don't overextend financially, and helps with budgeting for your home loan repayments.

4. Using the Calculator

Tips: Enter your accurate net monthly income, all monthly expenses, and NAB's current assessment rate. Use realistic figures for the most accurate borrowing estimate.

5. Frequently Asked Questions (FAQ)

Q1: What is NAB's assessment rate?
A: This is the interest rate NAB uses to assess your loan application, typically higher than the actual loan rate to account for potential rate rises.

Q2: What expenses should I include?
A: Include all regular monthly expenses: living costs, existing loan repayments, credit card limits, and other financial commitments.

Q3: Is this the exact amount I can borrow?
A: This is an estimate. Your actual borrowing capacity may vary based on credit history, deposit amount, and other factors NAB considers.

Q4: How often does NAB update their assessment rate?
A: NAB may adjust their assessment rate periodically in response to market conditions and regulatory requirements.

Q5: Can I improve my borrowing capacity?
A: Yes, by reducing expenses, increasing income, paying down debts, or saving a larger deposit.