What is the 30% income rule for housing?

The 30% rule is the standard Australian benchmark for housing affordability: you should spend no more than 30% of your gross (pre-tax) household income on housing costs — whether rent or mortgage repayments. Spending above 30% is classified as housing stress by the Australian Institute of Health and Welfare. This calculator uses the 30% rule to colour-code suburbs as affordable (green), tight (amber), or out of reach (red) based on your income.

How much deposit do I need to buy a house in Australia in 2025?

Most lenders require a minimum 5–10% deposit for owner-occupiers, but the standard benchmark is 20% because this avoids Lenders Mortgage Insurance (LMI). With the First Home Guarantee (FHBG), eligible first home buyers can purchase with just a 5% deposit without paying LMI — because the federal government guarantees the remaining 15%. Property price caps apply by region, and there are 50,000 FHBG places available each financial year.

What is LMI and how do I avoid it?

Lenders Mortgage Insurance (LMI) is an insurance premium paid by the borrower — not the lender — that protects the lender if you default on your loan. LMI is typically required when your deposit is below 20% of the property value (i.e., your loan-to-value ratio exceeds 80%). The premium can range from $5,000 to $35,000+ depending on the loan amount and LVR. You can avoid LMI by: saving a 20% deposit; using the First Home Guarantee (5% deposit, no LMI for eligible buyers); having a guarantor (a parent who uses their property as security); or working with a mortgage broker who has lenders that waive LMI for certain professions.

How does stamp duty work in Australia?

Stamp duty (formally called transfer duty in most states) is a state government tax on property purchases. Each state and territory sets its own rates and thresholds. In NSW, for example, a $750,000 property attracts around $29,000 in stamp duty for an investor, but a first home buyer may pay significantly less or nothing at all depending on the value and their eligibility. Our stamp duty calculator covers all 8 states and territories with current rates — find it under Calculators in the navigation.

What is the First Home Guarantee (FHBG)?

The First Home Guarantee (formerly the First Home Loan Deposit Scheme) allows eligible first home buyers to purchase with a 5% deposit and avoid paying LMI. The federal government (via Housing Australia) guarantees the remaining 15% of the deposit, so the lender treats the loan as if it has a 20% deposit without requiring you to pay LMI. There are 50,000 places available per financial year. Income caps apply ($125,000 for singles, $200,000 for couples) and property price caps vary by state and region.

What's the difference between pre-approval and full loan approval?

Pre-approval (also called conditional approval) is a lender's in-principle agreement to lend you up to a certain amount, based on a preliminary assessment of your income, debts, and credit history. It typically lasts 90 days and gives you confidence to bid at auction or make offers. Full approval (formal approval or unconditional approval) comes after a successful purchase — the lender assesses the specific property (valuation, title) and formally approves the loan. Pre-approval is not guaranteed to lead to full approval, particularly if your financial situation changes or the property doesn't value at the purchase price.

How much does a mortgage broker cost?

Mortgage brokers in Australia are typically free to use — they are paid a commission by the lender (upfront and trailing), not by you. Brokers are required by law (under the National Consumer Credit Protection Act and the Best Interests Duty) to act in your best interests, not the lender's. A good broker will compare products from 20–40+ lenders to find the most suitable loan for your circumstances. Our broker directory lists licensed brokers you can contact directly.

How does this calculator work out affordability?

For rent, we compare the median weekly rent in each suburb against your 30% weekly income budget (or your custom budget if you set one). For buy, we calculate the monthly mortgage repayment on the suburb's median dwelling value at your chosen interest rate and loan term (default: 25 years, 80% LVR), then check if that repayment is within 30% of your gross monthly income. Suburbs where the repayment exceeds 30% but is under 50% of income are labelled 'tight'; above 50% is 'out of reach'. All figures are illustrative estimates — your actual borrowing capacity depends on your credit history and the specific lender.

What suburbs are affordable on $80,000 a year?

On $80,000 per year (roughly $1,538 per week before tax), your 30% rent budget is around $461/week. For buying, assuming a 6.5% interest rate and 25-year term, you could typically service a loan of around $350,000–$380,000 — meaning affordable suburbs would have median prices under $450,000–$480,000 assuming a 20% deposit. In 2026, this puts most Sydney and Melbourne suburbs out of reach, but opens up large parts of regional NSW, Queensland, South Australia, Western Australia, and Tasmania. Enter $80,000 in the calculator to see the full list filtered by your state.

Is this calculator updated for the current RBA cash rate?

Yes — the default interest rate used in the calculator is loaded from the current RBA cash rate (updated after each monthly RBA Board meeting). However, note that individual lenders' variable mortgage rates are typically 2–3 percentage points above the cash rate, so the default rate may be lower than what you'd actually pay. You can override the rate in the calculator to match a specific lender's rate or the rate you've been pre-approved at.

What data does this site use for median prices and rents?

Where governments publish it, we use the real thing. Rents come from the official median of new rental-bond lodgements — the measure Australian governments treat as authoritative — for around 2,940 suburbs across NSW, QLD and VIC (NSW Rental Bond Board, QLD RTA, VIC DFFH). Median sale prices come from real government sales data for 725 suburbs in SA and VIC, each based on 30 or more actual sales. For every other suburb we fall back to ABS 2021 Census rents (calibrated against the bond data) and a distance-based price model — always labelled as an estimate, never presented as fact. Full detail, sources and licences are on our Methodology and Data Sources pages.

Does this calculator account for negative gearing?

The main affordability calculator does not include negative gearing — it focuses on housing cost affordability relative to income. We have a dedicated Negative Gearing Calculator under the Calculators menu that models the full tax position of an investment property: rental income, interest expense, depreciation, property management costs, after-tax cash flow, and the net annual benefit at your marginal tax rate. Negative gearing can improve the after-tax cost of holding an investment property but does not change the pre-tax cash shortfall you need to fund from your income.

What is the First Home Owner Grant (FHOG)?

The First Home Owner Grant (FHOG) is a one-off cash grant from state governments for eligible first home buyers who are buying or building a new home. Grant amounts vary by state: in NSW the grant is $10,000 for new homes valued under $600,000; in QLD it's $30,000 for new homes; in WA it's $10,000. The FHOG is separate from stamp duty concessions and the federal First Home Guarantee. Eligibility criteria vary — most states require you to live in the property for at least 12 months. Our Resources page has a full breakdown by state.

How accurate is the suburb affordability data?

It depends on the suburb, and we're transparent about which is which. About 2,940 suburbs show official rental-bond-lodgement rents and 725 show real government sale prices — those are measured, not modelled. Everywhere else, figures are modelled from ABS 2021 Census data and shown with an '(est.)' label; our price model in particular runs low against real sales, so we flag it plainly rather than dress it up. Use the measured figures with confidence and the estimates as a starting point, then verify current listings with a local agent.

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ABSAustralian Bureau of Statistics RBAReserve Bank of Australia ATOAustralian Taxation Office ASICASIC MoneySmart AIHWInstitute of Health & Welfare HAHousing Australia

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Where can you afford to buy?

Common questions about Australian housing affordability

What is the 30% income rule for housing?

How much deposit do I need to buy a house in Australia in 2025?

What is LMI and how do I avoid it?

How does stamp duty work in Australia?

What is the First Home Guarantee (FHBG)?

What's the difference between pre-approval and full loan approval?

How much does a mortgage broker cost?

How does this calculator work out affordability?

What suburbs are affordable on $80,000 a year?

Is this calculator updated for the current RBA cash rate?

What data does this site use for median prices and rents?

Does this calculator account for negative gearing?

What is the First Home Owner Grant (FHOG)?

How accurate is the suburb affordability data?

Can we afford to live
where we want?