Expense planner

Lenders check this against a benchmark

When you apply, your declared expenses are compared against a household expenditure benchmark, and the higher of the two is used. Understating spending does not help — it usually just makes the assessment slower.

The benchmark is not published and it is not a single number. It scales with income, location and household size, on the reasoning that a higher-earning household in a capital city genuinely spends more than a modest one in a regional town. Which means no calculator, this one included, can tell you exactly where your benchmark sits. What it can tell you is your real figure, which is the half of the comparison you control.

Enter each cost at its own frequency

Insurance is usually quarterly, groceries are weekly, rent is monthly. Converting them by hand is where the arithmetic goes wrong, so each field carries its own frequency and the calculator normalises the lot to a monthly figure.

The conversion is the year, not the month: 52 weeks, 26 fortnights, 12 months, four quarters. A $250 weekly shop is $1,083 a month rather than $1,000, and a $320 quarterly insurance bill is $107 a month rather than a bill you forget about until it lands.

The categories that surprise people

Insurance, subscriptions and irregular bills are the ones most often left out, because they do not arrive monthly. They are also the ones that quietly consume a surplus.

The usual omissions are annual car registration and green slip, health insurance excess, school fees and uniforms, vet and medical costs, streaming and gym memberships, and the once-a-year block that is Christmas and birthdays. Put them in “everything else” at the frequency they actually occur. An annual cost entered as yearly is handled correctly; an annual cost left out entirely is not.

Getting to your real number

The fastest honest method is three months of bank and credit card statements, categorised. It is tedious and it takes about an hour, and it is what a lender will be reading anyway, so you may as well see it first.

Once you have the expense figure, the budget planner puts it against your income to show the surplus, and the borrowing power calculator turns that surplus into a rough loan size.