Borrowing Capacity Calculator St George

St.George Borrowing Capacity Formula:

\[ Borrowing\ Capacity = \frac{(Income - Expenses) \times (1 - Buffer\ Rate)}{Interest\ Rate} \]

Annual Income:

Annual Expenses:

Interest Rate:

Buffer Rate:

Estimated Borrowing Capacity:

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1. What is the St.George Borrowing Capacity Calculator?

The St.George Borrowing Capacity Calculator estimates how much you can borrow based on your income, expenses, current interest rates, and the bank's 3% buffer rate. It provides a more accurate assessment of your borrowing power than standard calculations.

2. How Does the Calculator Work?

The calculator uses the St.George specific formula:

\[ Borrowing\ Capacity = \frac{(Income - Expenses) \times (1 - Buffer\ Rate)}{Interest\ Rate} \]

Where:

\( Income \) — Your annual gross income
\( Expenses \) — Your annual living expenses
\( Buffer\ Rate \) — St.George's 3% assessment rate buffer
\( Interest\ Rate \) — Current loan interest rate

Explanation: The equation accounts for your net income after expenses, applies the bank's buffer rate for assessment purposes, and calculates how much you can borrow based on current interest rates.

3. Importance of Borrowing Capacity Calculation

Details: Accurate borrowing capacity estimation is crucial for home loan applications, financial planning, and ensuring you don't overextend yourself financially.

4. Using the Calculator

Tips: Enter your annual income and expenses in dollars, current interest rate percentage, and the standard 3% buffer rate. All values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why does St.George use a 3% buffer rate?
A: The 3% buffer rate is used to ensure borrowers can still afford repayments if interest rates rise in the future.

Q2: What expenses should I include?
A: Include all regular living expenses such as groceries, utilities, transport, insurance, and existing loan repayments.

Q3: How accurate is this calculator?
A: This provides an estimate. Actual borrowing capacity may vary based on credit history, other debts, and specific bank policies.

Q4: Does this include all St.George lending criteria?
A: No, this is an estimate only. Final approval depends on comprehensive assessment including credit score, employment stability, and other factors.

Q5: Can I use this for investment properties?
A: Yes, but you may need to include rental income and consider different assessment criteria for investment loans.