"How much do I need to earn to buy a house?" is the question behind every property search — and the honest answer is: it depends on the price, your deposit, your other debts, and the interest rate the bank tests you against. This guide turns that into real numbers you can use.

The short answer

As a rough rule of thumb in 2025, you need a household income of roughly one-fifth to one-sixth of the property price, per year, to buy comfortably with a 20% deposit. So:

$500,000 home → roughly $90,000–$110,000 household income
$700,000 home → roughly $120,000–$150,000
$900,000 home → roughly $150,000–$190,000
$1,200,000 home → roughly $200,000–$250,000

These are ballparks for a 20% deposit and no other major debts. With a smaller deposit you'll need more income (you're borrowing more and may pay LMI); with a bigger deposit, less. Plug your own numbers into the affordability calculator to see exactly which suburbs fall into your range.

Why income isn't the only number that matters

Two people earning the same salary can be approved for very different loan sizes. Lenders don't just look at income — they assess your capacity to repay using:

Your living expenses — assessed against benchmarks, and your actual statements
Existing debts — credit cards, car loans, buy-now-pay-later and HECS/HELP all reduce how much you can borrow
Dependants — more dependants, lower borrowing power
The assessment (buffer) rate — lenders test whether you could still repay if rates rose around 3% above the actual rate

The buffer matters more than people expect. If the real rate is 6.2%, the bank checks you can afford repayments at roughly 9.2%. That single rule can cut the loan you qualify for by tens of thousands — which is why two earners on $100k can be offered very different amounts.

A worked example

Say a couple earns $130,000 combined, has no debts and a 20% deposit. On a $700,000 home they'd borrow $560,000. At a ~6.2% rate over 30 years, repayments are roughly $3,430/month — but the bank tests them at the buffer rate (~9.2%), where repayments are closer to $4,580/month. As long as their income comfortably covers the buffered figure after living costs, they're in range. Clear a $15,000 car loan, and their borrowing power jumps — often by $50,000–$80,000.

How to need less income

Save a bigger deposit — every extra dollar down is a dollar you don't borrow or pay interest on. Strategies to save faster →
Clear consumer debt first — closing a $10,000 credit card limit can lift borrowing power by $30,000–$40,000
Use the First Home Guarantee — buy with 5% deposit and no LMI if you're eligible. How it works →
Look at more affordable markets — regional and outer-suburb prices need a far lower income than inner-city
Consider a guarantor — a parent's equity can reduce your deposit need and avoid LMI

Single income vs couple

On a single income, the same property needs proportionally more of your salary because there's only one set of living expenses spread across one income — but also only one person's debts and expenses dragging the assessment down. Single buyers often do best by targeting a lower price point, maximising deposit, and checking single-parent schemes like the Family Home Guarantee (as little as 2% deposit).

Get your real number

The figures above are a guide — your actual borrowing power depends on your full financial picture. Two free tools will sharpen it: the borrowing capacity calculator estimates the loan you'd qualify for, and the affordability calculator maps that to suburbs you can actually buy in.

Next step: a mortgage broker can confirm your exact borrowing power across 30+ lenders, usually at no cost to you. Get matched with a broker → Or grab the First Home Buyer's Guide for the full step-by-step.

General information only — it doesn't consider your personal circumstances. Confirm your position with a licensed mortgage broker or financial adviser before acting.