Property Affordability Calculator
Find out what property price you can realistically afford — based on your deposit, income, and living costs — using the same methods Australian banks use.
Your Financial Details
Total savings available including any gifts or grants.
If below the HEM benchmark for your household, the bank minimum will be used.
HEM benchmark: $2,000/month
Affordable Purchase Price
$396,263
Serviceability-limited — borrow more with higher income
Loan Required
$316,076
estimated
LVR
80%
loan-to-value
Monthly Repayment
$1,998
at 6.5%
LMI Cost
None
20%+ deposit — LMI waived
Buying Costs Breakdown
Maximum price comparison
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This calculator provides estimates only and does not constitute financial or legal advice. Stamp duty and buying costs vary by state, property type, and buyer status. Speak with a mortgage broker and conveyancer for personalised figures.
Deposit vs Borrowing: Two Different Limits
Your maximum affordable purchase price is constrained by two separate factors, and the lower of the two wins:
1. Deposit constraint
With a 20% deposit requirement and $100,000 in savings (after buying costs), the most you can spend is $500,000 — even if a bank would happily lend you more. Choosing a 10% or 15% deposit allows you to buy at a higher price with the same savings, but Lender's Mortgage Insurance (LMI) will apply.
2. Serviceability constraint
Banks assess whether you can afford repayments at your actual interest rate plus a 3% buffer (required by APRA). They deduct living expenses — using at least the HEM (Household Expenditure Measure) benchmark — and existing debts. The remaining surplus determines your maximum monthly repayment, which sets your borrowing limit.
Understanding LMI
Lender's Mortgage Insurance (LMI) is charged when your loan-to-value ratio (LVR) exceeds 80% — meaning your deposit is less than 20% of the purchase price.
- 85% LVR (15% deposit): LMI typically costs around 0.5–0.8% of the loan amount
- 90% LVR (10% deposit): LMI rises to around 1–1.5% of the loan amount
- 95% LVR (5% deposit): LMI can reach 2.5%+ of the loan amount
LMI can be capitalised into your loan — you don't necessarily need to pay it upfront — but it increases your total loan balance and repayments. The best way to avoid LMI is to save a 20% deposit, or explore government schemes such as the First Home Guarantee (formerly FHLDS) which allows eligible first-home buyers to purchase with just 5% deposit and no LMI.
Frequently Asked Questions
How does the affordability calculator work?
The calculator uses two tests and takes the lower result. First, it calculates the maximum purchase price your deposit can support at your chosen deposit percentage. Second, it estimates your borrowing capacity using your income, expenses, and the HEM benchmark — the same method Australian banks use. The binding constraint (whichever limits you more) determines your affordable purchase price.
What is the difference between deposit-limited and serviceability-limited?
If you are deposit-limited, your savings are the bottleneck — even if a bank would lend you more, you don't have enough deposit for a higher-priced property. If you are serviceability-limited, your income cannot support repayments on a larger loan — but your deposit could cover a higher purchase price if you could borrow more.
Why does the calculator deduct buying costs from my savings?
In addition to your deposit, you need to cover stamp duty, conveyancing fees, building inspections, and other settlement costs. These typically add 4–6% on top of the purchase price. The calculator uses approximately 7% of savings as a buffer for these costs, leaving the rest available as your deposit.
What is LMI and when does it apply?
Lender's Mortgage Insurance (LMI) is a one-off premium charged by lenders when your deposit is less than 20% of the purchase price (i.e. LVR above 80%). LMI protects the lender — not you — in case you default. The cost typically ranges from 0.5% to 2.5% of the loan amount and can usually be added to (capitalised into) your loan. Saving a 20% deposit avoids LMI entirely.
Are these figures accurate?
This is an estimate based on simplified assumptions. Actual borrowing capacity varies by lender, your credit history, employment type, and other factors. Stamp duty rates also vary by state and buyer status. Use our Stamp Duty Calculator for a precise duty estimate, and speak with a mortgage broker for a personalised borrowing assessment.