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How much can you afford to borrow for a home on your salary?
How much can I borrow with a home loan? Find out how much you can afford to borrow on a $50k, $75k, $100k or $125k salary or on a joint income with a partner.
28 Mar 2025
How much can I borrow with a home loan? Find out how much you can afford to borrow on a $50k, $75k, $100k or $125k salary or on a joint income with a partner.
KEY POINTS:
- The size of your deposit is a key factor in determining your home loan borrowing power.
- You may like to use Canstar’s borrowing power calculator to give you an estimate of your own borrowing capacity.
- A couple with a combined income of $150,000 could afford to borrow about $620,000 for a home loan.
If you’re thinking about getting on the property ladder, you may be wondering what kind of borrowing capacity you might have. The answer to this comes down to three key factors.
The first is how much you have saved already. You will usually need at least a 5% deposit to secure a home loan and, if you want to avoid Lenders Mortgage Insurance (LMI), in most cases you’ll need a 20% deposit. You’ll also need some extra money for the upfront costs that come with buying a property such as stamp duty and conveyancing fees. First home buyers may find the First Home Super Saver (FHSS) Scheme a useful way to help save for this deposit.
The second factor is how much a lender will actually lend you. Lenders in Australia must abide by the responsible lending laws, which is done by assessing several factors such as your income, employment, living expenses, debts, liabilities and credit history. There are a number of online calculators you can use that will provide an estimate but if you want to be certain then it’s best to get formal home loan pre-approval from a lender.
You can also check your credit score for free with Canstar or via the Canstar App.
Finally, it’s important to think about how much you can realistically afford in repayments. You don’t want to stretch yourself too thin and end up suffering from mortgage stress if home loan interest rates were to rise. Generally speaking, if you want to avoid mortgage stress you should be spending less than 30% of your pre-tax income on your home loan repayments. If you’re on a high income you may be able to afford to borrow more but 30% is one of the most commonly used benchmarks.
Owner occupied
20% min deposit
Redraw facility
Owner occupied
20% min deposit
Redraw facility
How much can I borrow for a home loan?
Canstar Research has crunched the numbers to show you how much you can afford to borrow with a home loan on various salaries assuming that around 30% or less of your gross income goes towards mortgage repayments. It also factors in the serviceability buffer of 3 percentage points that lenders need to include when assessing your application.
As the table below shows, if you’re on a single income of $100,000 a year you could afford to borrow $338,000. Assuming you had a 20% deposit, that would mean you could potentially buy a property worth about $422,000.
A couple with a combined income of $150,000 could afford to borrow about $620,000, and assuming that they have a 20% deposit saved up, they could potentially buy a home worth about $775,000.
How much can you afford to borrow for a home loan?
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| Gross Income |
Annual Expenses |
Borrowing Capacity (6.25%, 30 years) |
Property Value w/ 20% Deposit |
Monthly Repayments |
Monthly Repayments as % of Gross Income |
|---|---|---|---|---|---|
| Single Income… | |||||
| $50,000 | $20,000 | $155,000 | $193,000 | $954 | 22.90% |
| $75,000 | $25,000 | $246,000 | $307,000 | $1,515 | 24.20% |
| $100,000 | $30,000 | $338,000 | $422,000 | $2,081 | 25.00% |
| $125,000 | $35,000 | $429,000 | $536,000 | $2,641 | 25.40% |
| Joint Income… | |||||
| $50,000 x2 | $30,000 | $412,000 | $515,000 | $2,537 | 30.40% |
| $75,000 x2 | $37,500 | $620,000 | $775,000 | $3,817 | 30.50% |
| $100,000 x2 | $45,000 | $827,000 | $1,033,000 | $5,092 | 30.60% |
| $125,000 x2 | $52,500 | $1,035,000 | $1,293,000 | $6,373 | 30.60% |
Source: www.canstar.com.au – 18/03/2025. Interest rate of 6.25% based on RBA Lenders’ Rates (Jan-25) for new, owner-occupier variable loans from all institutions. Gross income and annual expenses based on chosen amounts. Borrowing power calculations assume a loan term of 30 years, 80% of income available to service the loan, and a 3% interest rate buffer. Tax calculations based on the 2024-25 Financial Year, excluding Medicare Levy.
If your salary wasn’t represented in the above table, you may be interested in using Canstar’s borrowing power calculator, which could give you a more personalised estimate. You can also compare home loans with Canstar, if you’re beginning to consider your options.
It’s important to read all relevant documentation, such as the Product Disclosure Statement (PDS) and Target Market Determination (TMD), for any loan product you are considering. Due to the large financial commitment a home loan represents, it’s recommended to get professional financial advice before making a decision.
Cover image source: PeopleImages.com – Yuri A/Shutterstock.com
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.
Owner occupied
10% min deposit
Redraw facility
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