Home Affordability Calculator

Serviceability is the percentage of your gross income that goes towards loan repayments. Most lenders in Australia use a serviceability limit of around 30% of gross income. This means if you earn $8,000 per month before tax, the bank expects your repayments to be no more than about $2,400. Banks also add a buffer (usually 2-3%) on top of the actual interest rate when assessing your application.

Most lenders prefer a 20% deposit to avoid Lenders Mortgage Insurance (LMI). For a $750,000 property, that is $150,000. Some lenders accept as little as 5%, but you will pay LMI which can add thousands to your loan. First home buyers may qualify for the First Home Guarantee scheme, which lets you buy with as little as 5% deposit without LMI.

Lenders look at all your ongoing debt commitments, including car loans, personal loans, credit card limits (even if you pay the balance in full each month), HECS/HELP debt, afterpay or buy-now-pay-later balances, and any other regular repayments. Reducing these debts or closing unused credit cards can increase how much you can borrow.