Loan Repayment Calculator
Core Loan Mechanics
⚡️ Offset & Extra Repayments Simulator
Add starting balances and regular contributions to your offset account to calculate exact milestones.
Borrowing Health & Living Expenses (HEM)
APRA Servicing Assessment
Required Repayment Configuration
Interest Rate Stress Test (APRA Buffer)
Life of Loan Breakdown
Knowledge Base: How Lenders Assess Your Application
1. The APRA 3% Stress Test Buffer
When you apply for a loan, banks do not test your ability to repay at the advertised rate (e.g., 6.15%). The Australian Prudential Regulation Authority (APRA) mandates that lenders add a 3.00% buffer. If you apply at 6.15%, you must prove you can comfortably afford repayments if rates hit 9.15%.
2. What is HEM?
The Household Expenditure Measure (HEM) is a quarterly benchmark used by lenders as a hard "floor" for living costs. It splits spending into absolute basics (median spend) and discretionary basics (25th percentile). If your declared living expenses are lower than the HEM for your household profile and income band, the bank will override your figures and use the higher HEM amount.
3. Closing Unused Credit Limits
Credit cards drastically impact borrowing capacity. Each $10,000 of available credit limit is treated as roughly $300/month in committed expenses, regardless of whether your balance is zero. Closing unused cards before applying is one of the fastest ways to improve borrowing power.