On a $600,000 loan over 30 years, 6.29% instead of 6.50% (the lowest and highest rates in the comparison below, checked 11 October 2026) saves about $82 a month, or about $29,700 in interest.
APRA-tested repayments, an LMI check and a lender rate comparison — instant and free.
Enter your loan details and click Calculate to see full repayment breakdown and serviceability assessment.
Indicative borrowing capacity at the standard 6× DTI ceiling used by most Australian lenders, plus the 7× DTI stretch some lenders allow for clean profiles. Actual capacity also depends on living expenses (HEM), existing debts, dependants, and current rates — the calculator above stress-tests your specific profile under APRA's +3% buffer.
| Gross annual income | Max loan @ 6× DTI | Max loan @ 7× DTI | 20% deposit needed |
|---|---|---|---|
| $60,000 | $360,000 | $420,000 | $90,000 – $105,000 |
| $80,000 | $480,000 | $560,000 | $120,000 – $140,000 |
| $100,000 | $600,000 | $700,000 | $150,000 – $175,000 |
| $120,000 | $720,000 | $840,000 | $180,000 – $210,000 |
| $150,000 | $900,000 | $1,050,000 | $225,000 – $262,500 |
| $200,000 | $1,200,000 | $1,400,000 | $300,000 – $350,000 |
DTI (debt-to-income ratio) = total household debt ÷ gross annual income. APRA flags loans above 6× DTI as higher-risk; most banks cap at 6× and some lenders stretch to 7× for clean profiles (no HECS, no car loan, no credit-card debt). Figures assume single applicant with no other debt; couples combine income but lenders only count ~70–80% of the lower earner in serviceability. Always verify with the calculator above using your actual numbers.
How much you can borrow depends on your gross income, existing debts, number of dependants, and the lender's serviceability assessment. APRA requires lenders to test repayments at your contracted rate plus a 3% buffer (minimum 5.25%). As a rough guide, most lenders will approve a loan up to 6× your annual gross income, though individual circumstances vary significantly.
LVR (Loan-to-Value Ratio) is your loan amount divided by the property value, expressed as a percentage. When your LVR exceeds 80%, most lenders require Lenders Mortgage Insurance (LMI). LMI protects the lender — not you — if you default. Premiums can add $10,000–$30,000+ to your loan. Saving a 20% deposit avoids LMI entirely. If the bank values the home below the price you agreed, lenders work out the LVR on the valuation; the valuation shortfall calculator shows what that costs.
APRA requires all Australian lenders to assess your ability to repay at your contracted interest rate plus 3%, with a minimum floor of 5.25% p.a. This buffer protects borrowers against future rate rises. If you borrow at 6.2%, the bank actually tests your repayments at 9.2% p.a. This is a mandatory stress test — not the rate you actually pay.
Principal & Interest (P&I) repayments reduce your loan balance over time. Interest Only (IO) repayments cover only the interest for a set period (typically 1–5 years), after which the loan reverts to P&I. IO repayments are lower at first, but the loan balance doesn't fall during the interest-only period and total interest over the loan's life is higher.
APRA considers a DTI ratio of 6× or more (total debt ÷ gross annual income) as higher risk. Since 1 February 2026, APRA has limited loans at 6 or more times income to 20% of each bank's new owner-occupier lending, and 20% of its new investor lending. Many lenders cap loans at 6× or 7× DTI. For example, on a $100,000 income, a DTI of 6× means $600,000 of debt. A lower DTI improves your approval chances.
Most lenders require at least 5% of the purchase price as genuine savings — funds held for 3+ months in your name. A 20% deposit (LVR 80%) avoids Lenders Mortgage Insurance entirely. Under the First Home Guarantee (part of the Australian Government 5% Deposit Scheme), eligible first home buyers can buy with a 5% deposit without paying LMI — the Government guarantees up to 15% of the property's value. Eligible single parents can buy with a 2% deposit. Stamp duty and conveyancing costs are extra and not lendable in most cases.
Variable rates move with RBA decisions and usually come with an offset account, redraw and free extra repayments. Fixed rates (typically 1–5 years) keep your repayment the same for the fixed period, but often have no offset account and charge break costs if you leave early. The RBA raised the cash rate to 4.60% from 30 September 2026, its fourth rise of 2026. Some borrowers split the loan: part fixed for a steady repayment, part variable for the offset account. If you are on a variable rate, the RBA rate change calculator shows what a rise or cut does to your repayment.
Mortgage brokers (MFAA or FBAA accredited) access 20–40+ lenders and are paid by the lender, not you. They handle paperwork, negotiate rates, and often source deals not advertised publicly. Going direct works if you already have an established banking relationship and a clean credit profile. Brokers add the most value for complex situations: self-employed income, high LVR, recent credit events, or refinancing across multiple debts.
The First Home Guarantee, now part of the Australian Government 5% Deposit Scheme, lets eligible first home buyers buy with a 5% deposit and no LMI. The Government guarantees up to 15% of the property's value. Since 1 October 2025 there are no income caps and no limit on places, and the property price caps are higher. Price caps vary by location; the postcode search at firsthomebuyers.gov.au shows yours. Because no LMI is added to your loan, your APRA-tested borrowing power is slightly higher than on a 5% deposit loan with LMI added to the balance.