Suncorp Borrowing Capacity Calculator

Suncorp Bank Formula:

\[ \text{Max Borrowing} = \frac{(\text{Income} \times \text{Affordability Ratio}) - \text{Expenses}}{\text{Servicing Rate}} \]

Income (AUD):

AUD

Affordability Ratio (decimal):

decimal

Expenses (AUD):

AUD

Servicing Rate (decimal):

decimal

Max Borrowing (AUD):

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1. What is the Suncorp Borrowing Capacity Formula?

The Suncorp Bank borrowing capacity formula calculates the maximum amount you can borrow for a home loan based on your income, expenses, and the bank's specific affordability and servicing criteria. This helps determine your borrowing power for mortgage applications.

2. How Does the Calculator Work?

The calculator uses the Suncorp Bank formula:

\[ \text{Max Borrowing} = \frac{(\text{Income} \times \text{Affordability Ratio}) - \text{Expenses}}{\text{Servicing Rate}} \]

Where:

\( \text{Income} \) — Your annual income in AUD
\( \text{Affordability Ratio} \) — Bank's affordability assessment ratio (typically 0.3-0.4)
\( \text{Expenses} \) — Your annual living expenses in AUD
\( \text{Servicing Rate} \) — Bank's loan servicing rate (interest rate + buffer)

Explanation: The formula calculates your disposable income after expenses and divides it by the servicing rate to determine maximum borrowing capacity.

3. Importance of Borrowing Capacity Calculation

Details: Accurate borrowing capacity calculation is crucial for home loan applications, financial planning, and ensuring you don't overextend yourself financially. It helps determine what you can comfortably afford to repay.

4. Using the Calculator

Tips: Enter your annual income in AUD, the bank's affordability ratio (as a decimal), your annual expenses in AUD, and the servicing rate (as a decimal). All values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical affordability ratio used by Suncorp?
A: Suncorp typically uses affordability ratios between 0.3-0.4, meaning they assess your ability to spend 30-40% of your income on mortgage repayments.

Q2: How is the servicing rate determined?
A: The servicing rate includes the current interest rate plus a buffer (usually 2-3%) to account for potential rate rises.

Q3: What expenses should be included?
A: Include all living expenses such as groceries, utilities, transport, insurance, and existing loan repayments, but exclude the proposed mortgage repayment.

Q4: Does this calculation include other debts?
A: Yes, existing loan repayments and other financial commitments should be included in your expenses calculation.

Q5: Is this the only factor Suncorp considers?
A: No, Suncorp also considers credit history, employment stability, deposit amount, and property value when assessing loan applications.