Estimate your potential borrowing capacity and upfront costs to see if you're ready to buy your first home.
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Understanding Your First Home Buyer Eligibility
Buying your first home is a significant milestone, and understanding your financial readiness is crucial. This calculator provides an estimate of your potential borrowing capacity and the total upfront costs you might encounter, helping you make informed decisions.
How the Calculator Works:
This calculator uses a simplified model to estimate two key figures: your potential borrowing power and the total upfront costs.
1. Estimated Borrowing Capacity:
Lenders assess your ability to repay a loan based on your income, expenses, and existing debts. This calculator uses a common approach where lenders assess serviceability against a higher hypothetical interest rate (the assumed lender interest rate plus a buffer) to ensure you can still afford repayments if rates rise.
Key Factors:
Total Gross Income: Sum of your and your partner's annual income.
Existing Debt Repayments: Your total monthly debt payments are converted into an annual figure.
Assumed Interest Rate: The sum of the 'Assumed Lender Interest Rate' and the 'Lender Serviceability Buffer'.
Living Expenses: While not explicitly asked for, lenders have benchmarks for living expenses. This calculator simplifies by focusing on debt repayments.
The calculation estimates how much you could potentially borrow by considering your net income after deducting existing debts and a buffer for potential interest rate rises.
2. Total Upfront Costs:
Beyond the deposit, numerous other costs are associated with purchasing a property. This calculator sums your provided figures to give you a clearer picture of the initial financial outlay.
Common Upfront Costs Include:
Deposit: Typically 5-20% of the property value.
Lender's Mortgage Insurance (LMI): Required if your deposit is less than 20%.
Stamp Duty: A government tax on property transactions. First home buyer concessions may apply.
Legal Fees: For conveyancing and contract review.
Inspection Fees: For pest and building reports.
Loan Establishment Fees: Charged by the lender.
By adding your estimated deposit, other upfront costs, and the potential borrowing capacity, you get an idea of the total funds required for your first home purchase.
Important Disclaimer:
This calculator provides an *estimate* only. Actual borrowing capacity and upfront costs will vary based on the specific lender, your individual financial circumstances, government concessions, and current market conditions. It is highly recommended to consult with a mortgage broker or financial advisor for personalized advice.
function calculateFirstHomeBuyer() {
var estimatedHomePrice = parseFloat(document.getElementById("estimatedHomePrice").value);
var annualIncome = parseFloat(document.getElementById("annualIncome").value);
var annualPartnerIncome = parseFloat(document.getElementById("annualPartnerIncome").value);
var existingDebts = parseFloat(document.getElementById("existingDebts").value); // Monthly
var savingsForDeposit = parseFloat(document.getElementById("savingsForDeposit").value);
var otherUpfrontCosts = parseFloat(document.getElementById("otherUpfrontCosts").value);
var interestRateForEstimates = parseFloat(document.getElementById("interestRateForEstimates").value);
var lenderServiceabilityBuffer = parseFloat(document.getElementById("lenderServiceabilityBuffer").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = "; // Clear previous results
// Validate inputs
if (isNaN(estimatedHomePrice) || estimatedHomePrice <= 0 ||
isNaN(annualIncome) || annualIncome < 0 ||
isNaN(annualPartnerIncome) || annualPartnerIncome < 0 ||
isNaN(existingDebts) || existingDebts < 0 ||
isNaN(savingsForDeposit) || savingsForDeposit < 0 ||
isNaN(otherUpfrontCosts) || otherUpfrontCosts < 0 ||
isNaN(interestRateForEstimates) || interestRateForEstimates <= 0 ||
isNaN(lenderServiceabilityBuffer) || lenderServiceabilityBuffer 0 && numberOfMonths > 0) {
// Formula for Loan Amount (Present Value of an Annuity)
// PV = PMT * [1 – (1 + r)^-n] / r
estimatedBorrowingCapacity = maxLoanRepaymentPerYear / 12 * (1 – Math.pow(1 + monthlyInterestRate, -numberOfMonths)) / monthlyInterestRate;
// Ensure it's not negative due to edge cases
if (estimatedBorrowingCapacity 0) {
// If interest rate is 0 or invalid, it implies a very large loan if repayments are positive.
// This scenario is unlikely for serviceability and might indicate an issue with inputs.
// We'll cap it or show an error. For simplicity, we'll treat it as a very high capacity.
estimatedBorrowingCapacity = maxLoanRepaymentPerYear * 1000; // Arbitrary large number to signify high potential
}
// Add a check: borrowing capacity should not exceed the home price minus deposit
var requiredDeposit = Math.max(0, estimatedHomePrice * 0.05); // Minimum 5% deposit
if (estimatedBorrowingCapacity > estimatedHomePrice – requiredDeposit) {
estimatedBorrowingCapacity = estimatedHomePrice – requiredDeposit;
if (estimatedBorrowingCapacity < 0) estimatedBorrowingCapacity = 0;
}
// 2. Total Upfront Costs
var totalUpfrontCosts = savingsForDeposit + otherUpfrontCosts;
var totalFundsNeeded = estimatedHomePrice + otherUpfrontCosts; // This is not total funds needed, but the home price + other costs
var availableFunds = savingsForDeposit; // Savings go towards deposit and other costs
// Calculate total funds required for the purchase
var totalPurchaseCost = estimatedHomePrice + otherUpfrontCosts;
// Calculate how much more is needed beyond savings
var shortfall = totalPurchaseCost – savingsForDeposit;
if (shortfall < 0) shortfall = 0; // If savings exceed cost, shortfall is zero
// Combine borrowing capacity and deposit savings to see if it covers the home price
var potentialTotalFunds = estimatedBorrowingCapacity + savingsForDeposit;
// Display Results
var resultHTML = "
Your Estimated Financial Snapshot
";
resultHTML += "" +
"Estimated Borrowing Capacity: $" + estimatedBorrowingCapacity.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + "" +
"Based on your income, debts, and assumed interest rates.";
resultHTML += "" +
"Total Estimated Upfront Costs (Deposit + Others): $" + totalUpfrontCosts.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + "" +
"This includes your savings allocated for deposit and other expenses.";
resultHTML += "" +
"Total Funds Needed for Purchase (Home Price + Other Costs): $" + totalPurchaseCost.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + "" +
"This is the total estimated outlay for the property transaction.";
if (potentialTotalFunds >= estimatedHomePrice) {
resultHTML += "" +
"Good News! Your estimated borrowing capacity plus savings may cover the estimated home price and other costs." +
"";
} else {
resultHTML += "" +
"Potential Shortfall: You may need to save more or explore options to bridge the gap of approximately $" + (estimatedHomePrice – potentialTotalFunds).toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 }) + "." +
"";
}
resultDiv.innerHTML = resultHTML;
}