How this calculator works
- Your income. Base salary counts in full. Casual income, overtime, allowances and interest income are counted at 80%, as most lenders discount less-regular income.
- Tax. We deduct income tax, the Medicare levy and the Low Income Tax Offset using ATO 2026–27 resident rates.
- Living expenses and debts. We subtract an estimate of basic living costs for your household, any private health or school fees you enter, and your debt commitments: 3.8% of each credit card or BNPL limit per month, your car and personal loan repayments, and your compulsory HECS/HELP repayment.
- The stress test. What’s left each month is what you could put towards a home loan. We work out the largest 30-year loan that amount could repay if rates were 3% higher than the rate for each deposit level.
- Your deposit ladder. For a 5%, 10% and 20% deposit we turn the loan into a property price (loan ÷ LVR), then add the first home buyer stamp duty for your state and your other costs to show the total cash you need.
Our living expense estimate is built only from public Australian Bureau of Statistics data — it is not the Household Expenditure Measure (HEM) used by lenders. We start from the ABS Household Expenditure Survey 2015–16 (the latest published), counting everyday essentials and discretionary spending at typical (median) levels, plus council and water rates and home and contents insurance. Amounts are brought to 2026 prices with the ABS Consumer Price Index and lifted by about 6.6% for real growth in household spending since 2015–16 (ABS Monthly Household Spending Indicator), then scaled with household income, with a fixed amount added for each dependant. Rent, childcare and school fees are excluded because they are assessed separately. Lenders use their own benchmarks, so their figure may differ.
What is the APRA 3% serviceability buffer?
Lenders regulated by the Australian Prudential Regulation Authority (APRA) must check that you could still afford your repayments if your interest rate were 3 percentage points higher than the rate you’d actually pay. So on a 6.47% loan, your income is tested against repayments at 9.47%. That’s why your borrowing capacity is lower than a simple “what can I afford at today’s rate” sum. APRA has kept the buffer at 3% since October 2021.
The 5% Deposit Scheme (First Home Guarantee)
The Australian Government 5% Deposit Scheme — formerly the First Home Guarantee — lets eligible first home buyers buy with a 5% deposit and no lenders mortgage insurance (LMI). Since 1 October 2025 there are no income caps and no limit on places. The property price must be under the cap for its location:
| State | Capital city & regional centres | Rest of state |
|---|---|---|
| NSW | $1,500,000 | $800,000 |
| VIC | $950,000 | $650,000 |
| QLD | $1,000,000 | $700,000 |
| SA | $900,000 | $500,000 |
| WA | $850,000 | $600,000 |
| TAS | $700,000 | $550,000 |
Regional centres: in NSW, Newcastle & Lake Macquarie, Illawarra, Central Coast, Coffs Harbour–Grafton, Mid North Coast and Richmond–Tweed; in VIC, Geelong; in QLD, the Gold Coast and Sunshine Coast. You must be an Australian citizen or permanent resident aged 18+, buying a home to live in with a principal & interest loan through a participating lender. You can’t use the scheme if you’d have 20% or more saved after purchase costs. Source: firsthomebuyers.gov.au.
First home buyer stamp duty by state
All states except Tasmania offer first home buyers some stamp duty relief (in SA, only on new homes). Stamp duty is usually paid from your own savings at settlement, on top of your deposit — lenders generally won’t lend extra to cover it unless you borrow at a higher LVR.
| State | Established home | New build |
|---|---|---|
| NSW | No duty up to $800,000; reduced duty up to $1,000,000 | |
| VIC | No duty up to $600,000; reduced duty up to $750,000 | |
| QLD | No duty up to $700,000; reduced duty up to $800,000 | No duty, no price cap |
| SA | No first home buyer concession — general rates apply | No duty, no price cap |
| WA | No duty up to $600,000; concessional rate up to $800,000 | |
| TAS | No first home buyer concession — the established-home exemption ended 30 June 2026 | |
Figures as at September 2026 from each state revenue office. Eligibility conditions apply, such as living in the home.
How to increase your borrowing power
- Cancel credit cards you don’t use. Many lenders count around 3–3.8% of the full limit as a monthly cost. This calculator uses 3.8%, so a $10,000 limit counts as $380 a month — even with a $0 balance.
- Pay off car and personal loans. Every dollar of monthly repayment you clear goes straight back into what you can put towards a home loan.
- Close buy now pay later accounts. They’re treated like credit cards.
- Grow your deposit. A bigger deposit moves you down the ladder to a lower LVR, which usually means a lower interest rate and a higher borrowing capacity.
Frequently asked questions
How accurate is this calculator?
It gives a realistic estimate using public data and common lending assumptions: ATO tax rates, the APRA 3% buffer, an ABS-based living expense estimate and typical treatment of debts. Every lender has its own policies, so the amount a lender approves can be higher or lower. Speak with a licensed credit professional for a personalised assessment.
Why does my interest rate change with my deposit?
Lenders price loans by loan-to-value ratio (LVR). Borrowing 90–95% of the price is riskier for the lender, so advertised rates are usually a little higher than at 80%. A higher rate means higher stress-tested repayments, which lowers how much you can borrow. Some lenders in the 5% Deposit Scheme charge their standard 80% LVR rate.
Do I need a 20% deposit to buy my first home?
No. Under the Australian Government 5% Deposit Scheme you can buy with a 5% deposit and no lenders mortgage insurance, provided the property is under your area’s price cap and you meet the eligibility rules.
Can stamp duty be added to my home loan?
Usually not. Stamp duty is normally paid at settlement from your own savings, on top of your deposit, and lenders generally won’t lend extra to cover it unless you borrow at a higher LVR. That’s why the calculator shows the total cash you need, not just the deposit.
Is the First Home Owner Grant included?
No. The First Home Owner Grant only applies to new homes and varies by state (NSW $10,000, VIC $10,000, QLD $30,000, SA $15,000, WA $10,000, TAS $20,000, with price caps in most states). If you’re eligible, it adds to the cash you have available.