AU Australia · Housing affordability
How much house can I afford in Australia?
A household in Australia with gross income of AUDa year, with AUDin savings available, can afford ...
Maximum purchase price . APRA serviceability test
AUD 289k
Bound by your income (30% at buffer rate) · AUD 231k mortgage on AUD 58k down
The two rules
Australia has two rules. Both must be met.
APRA's serviceability buffer means you must prove you can handle repayments at a rate well above what you actually pay. And without 20% deposit, Lenders Mortgage Insurance eats into your budget.
+3%
APRA serviceability buffer
All lenders must assess your ability to repay at the current variable rate plus a 3 percentage point buffer. At 6% variable, that means qualifying at 9%. Housing costs at this stress rate must stay within 30% of gross income.
payment(rate + 3%) <= income x 0.30
20%
Deposit to avoid LMI
A 20% deposit avoids Lenders Mortgage Insurance — a significant one-off cost that protects the bank, not you. You can buy with as little as 5-10% down, but LMI can add $10,000-$40,000+ to your costs.
deposit >= 0.20 x price
Have a place in mind?
Drop in a price and see where it fails.
Each test is independent: you need to clear both. The APRA buffer limits your monthly payment; the 20% deposit rule ensures you avoid LMI.
AUD
1 of 2 tests fail.
30% income rule (at 9%)short AUD 20k
You have AUD 95k/yrNeed AUD 115k/yr
20% depositpass
You have AUD 80kNeed AUD 70k
The lever you can actually pull
Two ceilings. Whichever is lower wins.
With your savings fixed, the price you can afford scales linearly with income — until the deposit rule starts to bind. Above the kink, more salary will not buy you a bigger place; more savings will.
What you can affordIncome limit (5.6× gross)Total down (5× cash + pension)
Your monthly budget
What you would actually pay each month.
APRA tests you at 9% (6% + 3% buffer), but your actual repayments are at 6%. That gap is your safety margin — and it is by design.
Monthly headroom
578
The stress test charges you 1.3× what you will actually pay. That spread is what you have, in theory, to absorb a rate cycle, or invest, if you would rather.
Where this lands you
Median house price, by city.
Your purchase-price ceiling (drawn in cyan) cuts across median house prices in Australia's capital cities. Cities above the line are out of reach without more income or more savings.
Sydney
AUD 1.50M
Canberra
AUD 1.05M
Gold Coast
AUD 1.10M
Melbourne
AUD 800k
Brisbane
AUD 1.01M
Adelaide
AUD 900k
Perth
AUD 950k
Hobart
AUD 650k
Darwin
AUD 650k
Within reachOut of reachYour ceiling · AUD 289k
Before you sign
This is probably the largest financial commitment of your life.
A home purchase is not just the price tag. There are significant costs on top that are not included in the affordability test above.
3-5.5%
Stamp duty (varies by state)
Transfer duty ranges from 3% to 5.5% of the purchase price, varying by state and property value. First home buyer exemptions and concessions can reduce or eliminate this for properties under state-specific thresholds. NSW offers an annual land tax option instead.
$2-5k
Council rates + strata levies
Annual council rates range from $1,500-$4,000+ depending on the local government area. Strata levies for apartments and townhouses add $2,000-$8,000+ per year covering building insurance, maintenance, and sinking fund.
?
LMI if under 20% deposit
Lenders Mortgage Insurance can cost $10,000-$40,000+ depending on the loan amount and LVR. It is a one-off cost that can be paid upfront or capitalised into the loan. The First Home Guarantee scheme may eliminate LMI for eligible buyers with 5% deposit.
None of this means you should not buy. It means you should go in with open eyes. The affordability test tells you what you can do. Whether you should depends on how long you plan to stay, your alternative investments, and the local market dynamics.
For scale
What else costs about AUD 289k?
- A two-bedroom apartment in Darwin · AUD 350k0.83×
- AUD 1,500/month invested at 7% real for 20 years (final portfolio value) · AUD 780k0.37×
- A three-bedroom house in Adelaide's inner west · AUD 720k0.40×
- A beach house on the Gold Coast (3 bed, canal frontage) · AUD 950k0.30×
- A Queenslander renovation in Brisbane's inner suburbs · AUD 600k0.48×
- A waterfront apartment in Hobart's Sullivan Cove · AUD 850k0.34×
- A four-bedroom family home in Melbourne's eastern suburbs · AUD 1.40M0.21×
See the full income x deposit matrix
income (down) / savings (right)
AUD 30k
AUD 60k
AUD 100k
AUD 200k
30,000/yr
AUD 91k
income-bound
AUD 91k
income-bound
AUD 91k
income-bound
AUD 91k
income-bound
50,000/yr
AUD 150k
savings-bound
AUD 152k
income-bound
AUD 152k
income-bound
AUD 152k
income-bound
80,000/yr
AUD 150k
savings-bound
AUD 243k
income-bound
AUD 243k
income-bound
AUD 243k
income-bound
120,000/yr
AUD 150k
savings-bound
AUD 300k
savings-bound
AUD 365k
income-bound
AUD 365k
income-bound
180,000/yr
AUD 150k
savings-bound
AUD 300k
savings-bound
AUD 500k
savings-bound
AUD 547k
income-bound
Gross income used. APRA buffer at +3% applied.
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Next steps
Tools and guides to get you there.
Mortgage calculatorBuild an amortization schedule with extra payments. See total interest and how fast you pay it off.CalculateSavings goal plannerSet your down-payment target and a deadline. We back-solve the monthly savings rate you need.PlanCompound interestSee how your down-payment savings grow over time. Visualize the difference one extra year makes.ProjectBuying your first homeA step-by-step guide covering down payments, mortgage options, and the true cost of homeownership.Read
Frequently asked
The Australian Prudential Regulation Authority (APRA) requires all lenders to assess borrowers at a minimum serviceability rate of the current variable rate plus a 3 percentage point buffer. If your rate is 6%, you must prove you can afford repayments at 9%. This buffer was introduced to protect borrowers from rate rises and has been in place since October 2021.
LMI is insurance that protects the lender (not you) if you default on your mortgage. It is required when your deposit is less than 20% of the property value. LMI is a one-off premium that can cost tens of thousands of dollars depending on the loan size and LVR. It can be paid upfront or capitalised into the loan. Avoiding LMI by saving a 20% deposit is one of the strongest financial incentives in Australian property.
Yes, but they vary by state. The First Home Owner Grant (FHOG) is typically $10,000-$30,000 for new homes only and has price caps. Most states also offer stamp duty exemptions or concessions for first home buyers under certain price thresholds. The federal First Home Super Saver Scheme (FHSSS) allows you to withdraw up to $50,000 of voluntary super contributions for a first home deposit. These incentives can significantly reduce the cash needed upfront.
Stamp duty (or transfer duty) is a state government tax on property purchases and varies significantly between states. Rates typically range from 3% to 5.5% of the purchase price, with higher rates for more expensive properties and foreign buyers. NSW has replaced stamp duty with an optional annual land tax for first home buyers. Victoria, Queensland, and other states offer concessions for first home buyers under price thresholds. Stamp duty is paid at settlement and must come from your savings — it cannot be financed into the loan.
Most Australian mortgages are variable rate, unlike the US where 30-year fixed is standard. Variable rates move with the RBA cash rate, so your repayments can change at any meeting. Fixed rates lock in a rate for 1-5 years (rarely longer), after which the loan reverts to variable. Many borrowers split their loan — part fixed, part variable — for a blend of certainty and flexibility. The APRA buffer applies regardless of whether you choose fixed or variable.
Negative gearing is an Australian tax policy that allows property investors to deduct rental losses (when interest and expenses exceed rental income) against their other income, reducing their overall tax bill. Combined with a 50% capital gains tax discount for assets held over 12 months, this makes investment property very tax-effective. Critics argue it inflates house prices by encouraging speculative demand, making it harder for first home buyers to compete. It remains one of the most debated policies in Australian housing.