When Can I Afford to Buy a House in Australia?
Income thresholds, deposit milestones, government schemes, and city benchmarks — so you know exactly where you stand and what needs to change for buying to become realistic.
How much can you borrow? Income vs borrowing capacity
Banks use your gross income to determine how much you can borrow, but they don't simply apply a multiple — they test whether you can afford repayments at your actual rate plus 3% (APRA's serviceability buffer). The table below shows indicative borrowing capacity for a single applicant with modest existing debts and typical living expenses.
| Gross income | 6× rule-of-thumb | Bank estimate (approx) | Monthly repayment |
|---|---|---|---|
| $60,000 | $360k | $200–$260k | ~$1,250/mo |
| $80,000 | $480k | $290–$350k | ~$1,740/mo |
| $100,000 | $600k | $370–$450k | ~$2,360/mo |
| $120,000 | $720k | $450–$540k | ~$2,830/mo |
| $150,000 | $900k | $560–$670k | ~$3,540/mo |
| $200,000 | $1.2m | $750–$900k | ~$4,720/mo |
Bank estimate assumes single applicant, no dependants, moderate existing debts, repayments tested at 8.85% (5.85% + 3% APRA buffer). Monthly repayment at 5.85% on the midpoint of bank estimate range, 30-year term. Actual approval depends on lender and full financial assessment.
A household with two incomes of $80k each ($160k combined) can typically borrow $700k–$850k — significantly more than a single $160k income due to lower HEM expenses per person being factored in. This is why dual-income couples dominate first home buyer approvals in capital cities.
Deposit milestones — how long to save?
How quickly you reach your deposit target depends on three variables: property price, your current savings, and monthly savings rate. The table below shows time-to-save at three monthly savings amounts for a 20% deposit on $700k (the "sweet spot" avoiding LMI in most major cities).
| Current savings | Save $1k/mo | Save $2k/mo | Save $3k/mo |
|---|---|---|---|
| $0 | 11.7 yr | 5.8 yr | 3.9 yr |
| $20,000 | 10.0 yr | 5.0 yr | 3.3 yr |
| $50,000 | 7.5 yr | 3.8 yr | 2.5 yr |
| $80,000 | 5.0 yr | 2.5 yr | 1.7 yr |
| $100,000 | 3.3 yr | 1.7 yr | 1.1 yr |
Target: $140k (20% of $700k). Excludes interest earned on savings. Use the Deposit Calculator for an exact date with your numbers.
City benchmarks — income and deposit needed
Median prices approximate for March 2026. Minimum household income to service mortgage at median price (20% deposit, 5.85%, 30yr, repayments ≤35% gross income). Non-FHB stamp duty shown. Use the Stamp Duty Calculator for first home buyer concessions.
Government schemes that can help you buy sooner
Buy with a 5% deposit and no LMI. The government guarantees the remaining 15% of the deposit. Price caps: Sydney $1.5m, Melbourne/Brisbane/ACT $950k, most other capital cities $800k, regional $700k. 50,000 places per year.
Cash grants for new home purchases. QLD: $30k. NT: $50k (contracts before 30 Sep 2026). WA: $10k. SA: $15k. VIC: $10k (regional only). NSW and ACT no longer offer a state FHOG.
Make voluntary super contributions and withdraw up to $15k per year (capped at $50k total) for a home deposit. Withdrawals taxed at your marginal rate minus 30%. Most beneficial for taxpayers in the 34.5% or 39% brackets.
All states offer partial or full stamp duty exemptions for first home buyers. NSW: fully exempt under $800k. VIC: exempt under $600k. QLD: exempt under $700k (established), new builds fully exempt (no cap). ACT: exempt under $1.02m (income limits apply). See the Stamp Duty Calculator for your state.