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To afford a $500,000 (500k) house, a household needs a modelled indicative income of about $134,537 a year with a 20% deposit (one earner on that, or two earners on about $67,269 each), under a 9.5% assessment rate, a 30-year loan and no other debts or dependants. This is not a lending decision. The assumptions and a smaller-deposit comparison are below.
Figures are modelled indicative estimates, not a pre-approval or a lending decision. They assume a 6.5% interest rate with a 3% serviceability buffer (9.5% assessment rate), a 30-year loan term, $4,000 a month in living expenses, no existing debts and no dependants. Every lender's actual serviceability calculator differs from this model.
This is entry-level territory in most capitals and comfortable ground in regional markets, so buyers here range from first-timers to downsizers. The page models a standard deposit through to a small one, and the gap matters: a smaller deposit means a bigger loan, a higher income to service it and usually lenders mortgage insurance added on top. Lenders also test repayment capacity at a buffer above the advertised rate, so the income required sits well above what the headline repayment suggests. Stamp duty is the other swing factor, varying sharply by state, with first home buyer concessions in several.
A smaller deposit means a bigger loan and a bigger modelled repayment to service, which raises the modelled income figure. Deposits under 20% typically also require Lenders Mortgage Insurance (LMI), an added cost not reflected in these repayment figures.
| Deposit | Loan size | Monthly repayment | Modelled household income | Each, if two earners split it evenly |
|---|---|---|---|---|
| 20%$100,000 | $400,000 | $2,528 | $134,537/yr | $67,269/yr |
| 10%$50,000 · LMI likely applies | $450,000 | $2,844 | $151,354/yr | $75,677/yr |
| 5%$25,000 · LMI likely applies | $475,000 | $3,002 | $159,763/yr | $79,882/yr |
In this calculator, the modelled requirement is about $134,537 a year either way: one earner on that figure, or two earners on about $67,269 each, split however the two incomes actually fall rather than exactly in half.
The binding assumption here is that repayments stay under 30% of gross household income. That cap is this calculator’s simplification, not a lender rule. Lenders work from income after tax, and each earner is taxed separately, so two earners can need less gross income than one to service the same loan.
Two sets of living costs and any existing debts can offset that difference. Two modest incomes with a car loan each do not always outperform one larger income with none.
Stamp duty is due at settlement, on top of your deposit, and is not part of the modelled income figures above. These are owner-occupier figures for someone who lives in the property, and they are not directly comparable across states. QLD's home concession is worth a flat $7,175 above $350,000 and must be claimed: you have to move in within a year and stay, or it is reassessed. Most of the remaining difference is not a concession at all, just three different rate schedules. NSW has no owner-occupier concession, and VIC's applies at $550,000 or below.
| State | Indicative stamp duty |
|---|---|
| NSW | $16,687 |
| VIC | $21,970 |
| QLD | $8,750 |
First home buyers may qualify for a concession or full exemption depending on the state and price threshold. Check your state and eligibility.
Enter your actual income, expenses and debts to see your modelled maximum borrowing power.
Under the assumptions modelled on this page (a 6.5% interest rate plus a 3% serviceability buffer, so a 9.5% assessment rate; a 30-year loan; $4,000 a month in living expenses; no other debts and no dependants), a household would need a modelled indicative income of about $134,537 a year with a 20% deposit, rising to about $151,354 with a 10% deposit and about $159,763 with a 5% deposit. This is a modelled figure, not a lending decision. Every lender assesses income, debts and expenses differently.
In this calculator, the modelled household income is the same as for a single applicant: about $134,537 a year at a 20% deposit, or roughly $67,269 each if two earners split it evenly. A second income does not halve the requirement, because the binding assumption on this page is that repayments stay under 30% of gross household income. That cap is this calculator's simplification, not a lender rule. Lenders work from income after tax, and each earner is taxed separately, so two earners can need less gross income than one to service the same loan. Two sets of living costs and any existing debts can offset that difference.
No. These are modelled indicative figures based on simplified assumptions, not a pre-approval, a quote or a lending decision. Real lenders assess your actual income type, existing debts, credit history, dependants, living expenses and their own risk appetite, and every lender's serviceability calculator is different. It is a starting point for a conversation with a lender or broker, not an answer.
A 20% deposit on $500,000 is $100,000, which avoids Lenders Mortgage Insurance (LMI). A 10% deposit is $50,000 and a 5% deposit is $25,000. Both usually require LMI, an insurance premium that protects the lender (not you) and is typically added to the loan. A smaller deposit means a bigger loan and a higher modelled income requirement.
Possibly, through the Australian Government 5% Deposit Scheme (the renamed Home Guarantee Scheme, run by Housing Australia). The Commonwealth guarantees the part of the loan above 80% of the property value, which is the exposure LMI is priced on, so no premium is charged and the guarantee itself is free. Since 1 October 2025 there is no income test and no limit on places. What decides it for a $500,000 purchase is the property price cap: it is set per state and territory and differs by area within them, and both the price you pay and your lender's valuation have to sit at or below it. Every borrower on the loan must separately qualify: at least 18, an Australian citizen or permanent resident, buying somewhere to live in, and with no interest in Australian property in the last 10 years, a rolling window rather than a never-owned test. Removing the income test does not mean income stops mattering: your lender still applies its own serviceability rules, which is what the figures on this page model. Check the current cap for your area with Housing Australia.
At the modelled 6.5% interest rate over 30 years, the indicative monthly repayment is about $2,528 with a 20% deposit, $2,844 with a 10% deposit, and $3,002 with a 5% deposit. These are principal-and-interest repayments at the actual rate, not the higher buffered rate lenders use to assess serviceability.
Indicative stamp duty on $500,000 is about $16,687 in NSW, $21,970 in VIC and $8,750 in QLD, as an owner-occupier who lives in the property. Two separate things make these figures differ, and only one is a concession: QLD's home concession is worth a flat $7,175 once the price is above $350,000, and it has to be claimed: you must move in within a year of the transfer and stay, or it is reassessed. The rest of the gap is simply that the three states charge different rates. NSW has no owner-occupier concession at all, and VIC's applies at $550,000 or below. Stamp duty is due at settlement on top of the deposit, so it needs to be budgeted for separately from the income required to service the loan. First home buyers may qualify for a further concession or exemption depending on the state and price.
A smaller deposit means a bigger loan. Over the same 30-year term a bigger loan needs a bigger repayment, and that takes more income to service under a lender's buffer and expense assumptions. A larger deposit therefore lowers the income this model shows.
Estimates only. Not financial or tax advice. Full disclaimer for your rights and our limitations of liability.
This calculator exists to show you the arithmetic. It applies published Australian rates, thresholds and formulas to the numbers you enter and shows the working, so you can check it. That is all it does — it produces a number and describes what the number is. It does not recommend anything and it holds no opinion about any financial product.
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