1. What is CBA Home Loan Borrowing Capacity?

CBA Home Loan Borrowing Capacity is the maximum amount you can borrow from Commonwealth Bank of Australia (CBA) based on your income, expenses, and CBA's standard assessment rate of 3.5%.

2. How Does the Calculator Work?

The calculator uses the CBA borrowing capacity formula:

Where:

• \( \text{Income} \) — Your total annual income (AUD)
• \( \text{Expenses} \) — Your total annual expenses (AUD)
• \( \text{CBA 3.5\% Rate} \) — CBA's standard assessment rate (0.035)

Explanation: This formula calculates how much you can borrow based on your net income after expenses, using CBA's standard assessment rate.

3. Importance of Borrowing Capacity Calculation

Details: Knowing your borrowing capacity helps you understand your home buying budget, plan your finances, and approach lenders with realistic expectations.

4. Using the Calculator

Tips: Enter your total annual income and expenses in AUD. All values must be valid (income > 0, expenses ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: Is the CBA 3.5% rate fixed?
A: While 3.5% is CBA's standard assessment rate, actual rates may vary based on individual circumstances and market conditions.

Q2: What expenses should I include?
A: Include all regular living expenses such as groceries, utilities, transportation, existing loan repayments, and other financial commitments.

Q3: Does this calculation include other factors?
A: This is a simplified calculation. Actual borrowing capacity may also consider credit history, existing debts, and other financial factors.

Q4: How often should I calculate my borrowing capacity?
A: Recalculate whenever your financial situation changes significantly, such as after a salary change or major expense adjustment.

Q5: Is this calculation specific to CBA?
A: Yes, this uses CBA's specific assessment methodology. Other lenders may use different assessment rates and criteria.