Your income is the starting point for a home loan in Australia, but it’s not the whole picture. Banks test whether you can afford repayments at your actual interest rate plus a 3 percentage point buffer set by APRA. On top of that, existing debts, credit card limits, HECS, and living expenses all reduce how much you can borrow. The result is a borrowing power figure that’s usually well below what a simple salary multiple would suggest.
This guide shows the real income needed for a home loan at common Australian price points, explains what moves your number, and covers a newer rule from February 2026 that adds another layer for higher-income borrowers.
Key points
- A single borrower on $100,000 with minimal debts can typically borrow between $450,000 and $540,000, depending on the lender.
- Banks test your repayments at roughly 9% to 9.5%, not the rate you’d actually pay. That single rule is what cuts borrowing power the most.
- From 1 February 2026, APRA capped high debt-to-income loans. Banks can only issue 20% of new lending to borrowers whose total debt is six times their income or more.
- A $10,000 credit card limit can reduce borrowing capacity by around $47,000, even at a zero balance.
- Borrowing power varies between lenders by $50,000 to $100,000 for the same person, because each lender uses a different expense model.
What income do you need for a $500,000 home loan?
A single borrower with no dependents and minimal debts generally needs a gross income of around $90,000 to $105,000 to borrow $500,000. A couple with no other debts can usually qualify on a combined income of around $120,000 to $140,000.
These ranges assume a 30-year principal and interest loan, an owner-occupier purchase, and no large existing debts like car loans or HECS balances above $20,000. Adding a $15,000 credit card limit or a $300 monthly car loan payment can push the required income up by $15,000 to $25,000.
What income do you need for a $700,000 home loan?
A single borrower generally needs a gross income of around $125,000 to $145,000. A couple with no other debts can typically qualify on a combined income of around $160,000 to $185,000.
At this price point, the APRA buffer is doing the most work. The bank isn’t checking whether you can afford repayments at 6% or 6.5%. It’s checking whether you could still make them at roughly 9% to 9.5%. That’s the gap between what borrowers expect and what they actually get approved for.
| Loan amount | Single borrower (approx. gross income) | Couple, no other debts (approx. combined gross income) |
| $500,000 | $90,000 to $105,000 | $120,000 to $140,000 |
| $600,000 | $110,000 to $125,000 | $140,000 to $165,000 |
| $700,000 | $125,000 to $145,000 | $160,000 to $185,000 |
| $800,000 | $145,000 to $165,000 | $185,000 to $210,000 |
| $1,000,000 | $175,000 to $200,000 | $220,000 to $250,000 |
These figures are indicative only. They assume minimal debts, no dependents, and a 30-year owner-occupier loan. Actual borrowing power varies by lender, expenses, and credit profile.
Why does the APRA buffer reduce borrowing power so much?
APRA requires every bank to assess home loan applicants at the loan rate plus a buffer of at least 3 percentage points. This has been in place since October 2021 and APRA has confirmed the buffer will remain at 3 percentage points through 2026.
If the offered rate on a loan is 6.5%, the bank tests your budget at 9.5%. That difference alone can cut borrowing power by 20% to 25% compared to what the same income would have supported before the buffer existed. The buffer is there to make sure borrowers aren’t approved for a loan they can only afford at today’s rate, with no room for a rate rise later.
Non-bank lenders, which sit outside APRA’s direct supervision, are not subject to the same buffer requirement. Some apply a smaller buffer or none at all. A home loan broker in Sydney who works across both bank and non-bank panels can show you the difference this makes to your specific number.
What is the new debt-to-income cap from February 2026?
From 1 February 2026, APRA introduced a cap on high debt-to-income lending. Banks can now only issue 20% of their new mortgage lending to borrowers whose total debt is six times their gross income or more.
This is a quota, not a ban. A borrower with a DTI above 6 can still get approved, but only while the bank has room within its 20% allowance for that quarter. Once the quota fills up, the same borrower may need to apply with a different lender or reduce their loan amount.
The practical effect: if you earn $120,000 and want to borrow $720,000, your DTI is exactly 6. That puts you right on the boundary. Some lenders will still approve it, others may not, depending on where they sit against their quarterly quota. This makes lender selection more important than it used to be, and it’s one of the reasons borrowing power now varies between lenders more than most borrowers expect.
APRA exempts bridging loans for owner-occupiers and loans for new dwellings from the cap.
Do credit cards and HECS actually reduce how much you can borrow?
Yes, both of them. A credit card’s full approved limit counts as potential debt, even at a zero balance. Compare the Market’s own analysis found that a $10,000 credit card limit reduces borrowing capacity by around $47,000.
HECS-HELP debt works differently. It doesn’t show up as a separate repayment on your credit file, but from 2025-26 onwards, the ATO uses a marginal repayment system. For income above $67,000, repayments range from 1% to 7% of total income. Banks factor this into their assessment the same way they’d factor in any regular outgoing.
Reducing card limits and paying down HECS before applying are two of the more fixable ways to move borrowing power in the right direction.
Does borrowing power change depending on which lender you use?
Yes, and the gap is larger than most borrowers expect. Multiple borrowing power calculators and broker sources report a spread of $50,000 to $100,000 between lenders for the same applicant.
The main reasons: each lender uses a different living expense model (the Household Expenditure Measure, or HEM, versus declared expenses), different rules for shading bonus income or overtime, and different credit policies for casual employment or HECS-HELP debt. Two lenders looking at the same payslips and bank statements can reach different conclusions about how much they’re willing to lend.
This is also where the DTI cap adds a new variable. One bank might have filled its 20% quota for high-DTI loans that quarter, while another has room. The same borrower, with the same income and debts, can get two different answers within the same week.
The complete home loans guide for Sydney covers how this plays out when you’re also dealing with property-type restrictions and government schemes, and the Parramatta borrowing guide shows how postcode and apartment size add another layer on top.
Frequently asked questions
Can you buy a house with a $30,000 deposit?
It depends on the property price. On a $600,000 property, $30,000 is a 5% deposit. That’s enough to qualify for the Australian Government’s 5% Deposit Scheme, which waives Lenders Mortgage Insurance. Without the scheme, a 5% deposit would normally trigger LMI, adding thousands to the loan.
What salary do you need to buy an $800,000 house in Australia?
A single borrower with minimal debts generally needs a gross income of around $145,000 to $165,000. A couple can typically qualify on a combined income of $185,000 to $210,000. These are rough ranges, actual figures depend on the lender, your expenses, and any existing debts.
Does the APRA buffer apply to refinancing as well?
Yes, the same 3 percentage point buffer applies to refinance applications. APRA allows some case-by-case exceptions for refinancers who aren’t increasing their loan amount, but the buffer applies to most new assessments regardless of whether you’re buying or switching.
Is $500,000 a big mortgage in Australia?
By national standards, $500,000 is below the average new owner-occupier loan, which sat above $600,000 as of early 2026 according to ABS lending indicators. In Sydney, where median property prices are well above $1 million, a $500,000 loan is at the lower end of what most buyers need.
Can a 50-year-old get a 30-year home loan?
Yes. Lenders don’t have a fixed age cutoff, but they do need to see an exit strategy, meaning a realistic plan for how the loan gets repaid by retirement age. That might mean a shorter loan term or evidence of superannuation and other assets.
How much would I repay monthly on a $700,000 mortgage for 30 years?
At a 6.5% variable rate, monthly repayments on a $700,000 principal and interest loan over 30 years would be roughly $4,400 to $4,500. This is an indicative figure only and will change with the actual rate offered by the lender.
Conclusion
The table above gives you a starting range, but the real number depends on your specific debts, expenses, and which lender assesses you. The gap between lenders is wide enough that checking one bank alone can leave money on the table.
LendWise runs your numbers across a full panel of lenders, so you see the range rather than a single answer. Get in touch to check your borrowing power, or find out more about working with a mortgage broker in Sydney.
