Property · Serviceability 2026 · Updated July 2026
How much house can you afford in Australia?
As a working rule at mid-2026 rates (~6.1%): a household on $120,000 with typical expenses supports a loan around $442,000 — add your deposit for the price ceiling. The binding constraint isn't the advertised rate but the +3% APRA assessment buffer every lender applies.
Run your exact numbers → — Borrowing power + deposit, assessed the way lenders do
Estimated borrowing power by household income
These estimates assume $3,500/month living expenses, $500/month other repayments, a 6.1% rate assessed at 9.1% (the +3% buffer), and a 30-year term. Your deposit adds directly on top of the loan to give your price range.
| Gross household income | Est. borrowing power | + $150k deposit ⇒ price |
|---|---|---|
| $80,000 | ≈$163,000 | ≈$313,000 |
| $120,000 | ≈$442,000 | ≈$592,000 |
| $160,000 | ≈$703,000 | ≈$853,000 |
| $200,000 | ≈$946,000 | ≈$1,096,000 |
The three numbers that actually decide it
- Assessment rate: lenders test repayments at your rate +3%. At 6.1%, you're being assessed at 9.1% — which is why borrowing power feels lower than the repayment you think you can afford.
- Declared expenses: lenders benchmark against HEM and take the higher of your declaration or the benchmark. Trimming spending for 3–6 months before applying genuinely moves the number.
- Existing commitments: credit card limits count as debt even at $0 balance (typically ~3.8% of the limit as assumed monthly repayment). Cancelling unused cards is the cheapest borrowing-power boost available.
Don't borrow the maximum
The estimate above is a ceiling, not a target. At the maximum, a 1-point rate rise consumes most households' entire surplus. Budgeting to 80–85% of maximum borrowing keeps a rate-rise buffer and covers the costs the price tag hides: stamp duty (about $30,400 on an $800,000 established home in NSW), conveyancing, inspections and moving.
Common questions
How many times my salary can I borrow?
At current rates the practical answer is 3.5–4.5× gross household income for most borrowers — well below the old '5–6×' folklore from the low-rate era. Lenders also apply a hard ceiling around 6× income (DTI) regardless of surplus.
Does the 30% of income rule still apply?
It's a stress benchmark, not a lending rule: housing costs above 30% of gross income is the ABS definition of housing stress for lower-income households. Lenders assess surplus dollars, not percentages — but the 30% test remains a good personal sanity check.
Should I wait for a bigger deposit or buy sooner?
It's a race between your savings rate and property growth plus LMI costs. A 15% deposit with LMI often beats waiting two years for 20% in a rising market, and loses in a flat one. Run both scenarios through the affordability and savings calculators rather than guessing.