Monthly repayments by loan size
| Loan | 5.5% | 6.0% | 6.5% | At 9%* |
|---|---|---|---|---|
| $500,000 | $2,839 | $2,998 | $3,160 | $4,023 |
| $600,000 | $3,407 | $3,597 | $3,792 | $4,828 |
| $700,000 | $3,975 | $4,197 | $4,424 | $5,632 |
| $800,000 | $4,542 | $4,796 | $5,057 | $6,437 |
| $1,000,000 | $5,678 | $5,996 | $6,321 | $8,046 |
| $1,200,000 | $6,813 | $7,195 | $7,585 | $9,655 |
| $1,500,000 | $8,517 | $8,993 | $9,481 | $12,069 |
Monthly principal and interest repayments over 30 years. *The kind of rate lenders test you at: a 6% rate plus the 3% buffer.
For your own loan size, rate and frequency, use my mortgage repayment calculator.
How much do you need to earn?
There's no single answer, because every lender runs its own calculator. As a very rough guide, for a borrower with no other debts at all, lenders often lend somewhere around five to six times gross household income. Regulators watch loans above six times income closely, so many lenders limit how many of those they write.
- For a $700,000 loan. Very roughly $120,000 to $140,000 in gross household income, with no other debts.
- For a $1,000,000 loan. Very roughly $170,000 to $200,000 in gross household income, with no other debts.
These figures assume no other debts. Every other debt you have, such as a car loan, personal loan, credit card limit, buy now, pay later account or HECS-HELP, reduces the amount you can borrow, and in some cases by a lot. A $20,000 credit card limit you never use can cut tens of thousands from your borrowing power on its own. Your number also depends on your living expenses, dependants and how each lender treats your type of income. My borrowing power guide explains why, and the calculator on my homepage gives you a ballpark.
Why lenders test you at a higher rate
Lenders check that you could still afford the loan if rates rose by at least 3%. That's why the last column in the table matters more for approval than your actual rate. On a $700,000 loan, the difference between the two is around $1,400 a month.
Debt-to-income ratio
Your debt-to-income ratio (DTI) is your total debts, including the new loan, divided by your gross income. Many lenders set a maximum, and some LMI waivers cap it at five or six times income. Paying off a car loan or closing an unused credit card can lift your borrowing power more than you'd expect.
Questions people ask
How much do I need to earn for a $700,000 mortgage?
Very roughly $120,000 to $140,000 in gross household income, but only if you have no other debts at all. Car loans, personal loans, credit cards and HECS-HELP all reduce how much you can borrow, sometimes significantly.
What are the repayments on a $1,000,000 mortgage?
About $6,000 a month at 6% over 30 years, principal and interest. At 6.5% it's about $6,320.
What are the repayments on a $600,000 mortgage?
About $3,600 a month at 6% over 30 years, principal and interest.
What is a good debt-to-income ratio?
Below six times income is generally comfortable for lenders. Above that, fewer lenders will approve the loan.
