I've been looking at various Australia mortgage calculators and I can't believe how wildly they differ from each other when it comes to identifying how much you can borrow. Using the same information, I've found out I can borrow anything from <$150,00 to >$1,000,000.

How can you tell which ones are reliable and can be believed?

- CDM

You need to sit down and work out your budget first which will give you the amount that you can safely afford to spend on a mortgage each month. Then look at the plans to see which product is suitable for you. It is confusing, and I'm no accountant, just someone who is trying to get a mortgage. we could borrow up to $650k, but I wouldn't want to stretch myself- also calculate what will happen to the payments if interest rates rose by 3%- could you still afford the repayments? If not, borrow less.
My head hurts.

I agree. The best way to figure out how much you should be able to borrow is to figure out a budget and see what you have spare.

Don't forget about leaving yourself an extra $1,000 - $2,000 for emergencies and unexpected costs (most of mine seem to be on dental bills!). Then, you know how much you can afford in interest repayments.

If you then head to one of the main bank websites, they always have calculators telling you what the repayments will be for a mortgage of $x,000. Count on interest rates rising at some point and leave yourself some headroom, et voila.

I would think that would be a better way to plan, rather than relying on what a broker might try to get you to borrow.

While I find the mortgage calculators the only real reliable one is the amount you can afford each month (which you have to work out).

As everyone else said the best approach is see how much you can actually afford and then go from there.

When we bought our first home they would have given us 2-3 times the mortgage we were comfortable with. We ended up basing our mortgage on my husbands income only so that we didn't get ourselves into trouble. Even then, we chose to go on the low side.

Better to have more spending money and the option of paying the house off sooner than it is to be constantly worried about the mortgage. Just my opinion though.

As the others said make sure to allow for higher interest rates in case that happens again.

Perhaps I should have made myself clearer. I already know how much I can afford; that isn't the issue. I also already know about fiscal responsibility and the perils of not getting too deep into a mortgage whose payments may, after all, increase over time; that isn't the issue either.

The amount I can afford is just one of the pieces of information that you plug into a mortgage calculator so that it can do its thing. My point is that with this same information, many mortgage calculators vary wildly on what they then tell you would be the amount that you 'could' be lent.

I'm not that foolhardy that I would go ahead and lend at the top of my range (nor to completely rely on a mortgage calculator to begin with for that matter). I'm just trying to understand why different mortgage calculator differ so wildly from each other even when given the same information to work from.

- CDM