By Chaice Paterson, CEO & Founder, Low Deposit Homes | Updated June 2026
The single most common question Low Deposit Homes gets on the first call: “how much can I actually borrow?” The honest answer in 2026 is that a typical first home buyer can borrow approximately 4.5 to 5.5 times their annual household income, with the exact number depending on dependents, other debts (HECS, car loans, credit cards), the interest rate the bank assesses you at, and which lender you go to. A couple earning $145,000 combined with no children and minimal other debt can typically borrow around $700,000–$760,000 under standard financing. The same couple on the 5% Deposit Scheme can comfortably purchase a $1M new build because the no-LMI structure changes the maths. This guide walks through borrowing capacity by income, the scheme structures that change the answer, and the real-world examples that come up across LDH’s QLD and VIC clients.
The Borrowing Capacity Rule of Thumb in 2026
For a quick estimate, multiply your annual gross household income by these multipliers:
| Household Situation | Multiplier | Notes |
|---|---|---|
| Single, no dependents, no HECS | 5.5–6x | Maximum borrowing |
| Single, no dependents, with HECS | 4.5–5x | HECS reduces capacity by ~$50K |
| Couple, no kids, no other debt | 5–5.5x | Combined income |
| Couple, 1–2 kids, no other debt | 4–4.5x | Dependents reduce capacity |
| Couple, kids + HECS + car loan | 3.5–4x | Multiple debts compound the impact |
These are starting estimates. The real number depends on which lender you go to (capacity can vary by $50K–$150K between lenders on the same income), how the bank treats overtime, bonuses, and rental income, and the buffer rate the bank stress-tests you at (currently 3% above the variable rate).
How Much Income Do I Need to Buy a $1M New Build?
This is the headline question for most LDH clients. Let’s work through a $1M South East Queensland new build:
| Scheme | Loan size | Weekly repayment (~6%, 30yr) | Required combined household income |
|---|---|---|---|
| 5% Deposit Scheme | $950,000 | ~$1,260/week | $150,000–$170,000 |
| Help to Buy (40% gov equity) | $580,000 | ~$770/week | $95,000–$115,000 |
For Help to Buy applicants on $145,000 combined income, a $1M new build is comfortably serviceable. For 5% Deposit Scheme buyers, the same property requires $20–25K more combined income.
This is exactly why scheme selection materially affects who can buy what. The same buyer can access a $1M property on $115K under Help to Buy, or needs $155K under the 5% Deposit Scheme.
Borrowing Capacity By Household Income (Standard 5% Deposit Scheme Structure)
For LDH clients using the 5% Deposit Scheme (no LMI, full ownership), here’s what household income typically translates to in purchase price:
| Combined household income | Realistic purchase price (5% Deposit Scheme) |
|---|---|
| $85,000 | $550,000–$620,000 |
| $100,000 | $650,000–$720,000 |
| $120,000 | $780,000–$870,000 |
| $145,000 | $940,000–$1,050,000* |
| $170,000 | $1,100,000–$1,250,000* |
| $200,000 | $1,300,000–$1,450,000* |
*Borrowing capacity above $1M exceeds the 5% Deposit Scheme property caps for most areas. Caps apply: $1,000,000 for Brisbane / Gold Coast / Sunshine Coast / Beaudesert; $950,000 for Melbourne / Geelong; $700,000 for other QLD regional (including Toowoomba); $650,000 for other VIC regional. If your borrowing capacity exceeds your applicable scheme cap, you can either purchase at the cap (using the remaining capacity as a larger deposit or offset buffer) or step outside the scheme into standard financing.
These assume no significant HECS or other debt, no dependents, and a 6% interest rate. Add HECS or dependents and reduce these numbers by $50K–$100K depending on circumstances.
Important note on the 5% Deposit Scheme specifically: Buyers under the 5% Deposit Scheme are typically offered the same rates and lending policies as a buyer with a 20% deposit (because the government guarantee makes the loan equivalent to 80% LVR from the bank’s risk perspective). This means the serviceability buffer rate applied to your assessment is lower than for a non-scheme buyer at the same LVR — resulting in higher borrowing capacity. This is one of the underrated benefits of the scheme beyond just saving on LMI.
For Help to Buy applicants, your effective purchase capacity is meaningfully higher than the standard borrowing capacity above — because the government’s equity share (up to 40% on new builds) reduces your loan size to roughly 58–60% of the property value. A couple whose standard borrowing capacity is $760K can typically access a $1M new build under Help to Buy because the loan they actually take is around $580K. This is one of the structural advantages of Help to Buy for income-eligible buyers.
“The single biggest mistake first home buyers make is googling ‘how much can I borrow’ and getting one calculator’s answer, then assuming that’s the number. Borrowing capacity varies by $100K+ between lenders on identical incomes. The bank you choose matters as much as the income you earn — sometimes more. That’s why we run scheme + lender combinations on every discovery call. The right structure can be the difference between buying a $750K property and buying a $1M property on the same household income.” — Chaice Paterson, founder of Low Deposit Homes
What Reduces My Borrowing Capacity?
Six factors materially reduce how much you can borrow:
- HECS/HELP debt. Currently, lenders treat HECS as an ongoing expense. A $40K HECS debt typically reduces borrowing capacity by $40K–$60K depending on income.
- Car loans. A $500/month car loan reduces capacity by roughly $80K. A $700/month car loan can take $110K off your buying power.
- Credit card limits. Banks assess capacity based on credit card LIMITS, not balances. A $20K limit you never use still reduces capacity by ~$20K. Closing or reducing unused card limits before pre-approval is one of the highest-leverage things first home buyers can do.
- Dependents. Each child adds approximately $800–$1,200/month to assessed living expenses. Two children typically reduce borrowing capacity by $200K+.
- Other commitments. Personal loans, Afterpay/Zip accounts, novated leases, family loans — all reduce capacity.
- Buffer rate. Banks currently test serviceability at the actual interest rate PLUS 3%. So a 6% variable loan is assessed at 9% serviceability. This is conservative protection, but it also limits how much you can borrow during higher-rate environments.
What Increases My Borrowing Capacity?
Three practical levers:
- Choose the right lender. Borrowing capacity varies dramatically by lender. Some lenders are more generous on bonus income, casual work, rental income from spare rooms, and HECS treatment. We compare across our panel on every application.
- Reduce credit card limits. Lowering unused credit card limits before applying for pre-approval immediately increases borrowing capacity.
- Pay down or restructure debt. Paying out a car loan, consolidating personal debt, or paying down HECS (where strategic) can lift capacity meaningfully.
Real LDH Examples — How Borrowing Capacity Maps to Purchase Price
Example 1: Single buyer, $95K income, no debt, no kids — Help to Buy structure
- Help to Buy eligible (single income under $100K cap)
- 2% deposit ($14K) + 40% government equity ($280K) on a $700K property
- Effective loan: ~$406K
- Weekly repayment (~6%, 30yr): ~$600/week — comfortably within serviceability for $95K income
- Suitable corridors: Tarneit, Wyndham Vale, Truganina, Manor Lakes (VIC); not realistic in QLD growth corridors at this price point under standard 5% Deposit Scheme financing
Example 2: Couple, $130K combined, no kids, $30K HECS each
- Assessed borrowing capacity: ~$750,000
- Purchase price range achievable: $780K–$820K
- Suitable corridors: Werribee, Wyndham Vale, Craigieburn, Pakenham (VIC); limited new build options in this range in metro QLD — most SEQ packages start $850K
Example 3: Couple, $160K combined, 2 kids, no other debt
- Assessed borrowing capacity: ~$840,000 standard / ~$880,000 with 5% Deposit Scheme buffer benefit
- Purchase price range achievable: $880K–$940K
- Suitable corridors: Ipswich, Logan, Beaudesert, Caboolture (QLD); Pakenham, Werribee (VIC)
Example 4: Couple, $145K combined, no kids, no other debt, Help to Buy eligible
- Assessed borrowing capacity (Help to Buy): ~$1,050,000 effective purchase capacity
- Purchase price range achievable: $1M (cap)
- Suitable corridors: Any LDH metro corridor
Frequently Asked Questions
How much can a first home buyer borrow on $100,000 income in 2026?
For a single first home buyer earning $100,000 per year with no dependents and minimal debt, expected borrowing capacity is approximately $500,000–$580,000 under standard financing, or $600,000–$680,000 under the 5% Deposit Scheme (because the no-LMI structure allows you to use your full deposit toward the purchase). Lender selection meaningfully affects this — capacity can vary by $50K–$100K between major banks on the same income.
How much can a couple borrow on $150,000 combined income?
For a couple earning $150,000 combined with no children and minimal other debt, expected borrowing capacity is approximately $760,000–$860,000 standard. Under Help to Buy (40% government equity), the same couple can effectively access a $1M new build because the loan size drops to around $580K — comfortably within their serviceability.
Does HECS debt affect my borrowing capacity?
Yes. Lenders currently treat HECS/HELP debt as an ongoing expense (the compulsory repayment shows on your pay slip and counts against serviceability). A $40,000 HECS debt typically reduces borrowing capacity by approximately $40K–$60K depending on income. Paying down HECS can be financially strategic in the months before applying for pre-approval, but the maths depends on the specific numbers.
Why do different lenders give different borrowing capacity answers?
Each lender has its own serviceability calculator, with different treatment of bonus income, casual income, child support, rental income from spare rooms, HECS, and family commitments. Capacity can vary by $100K+ between major banks on identical income. This is one of the most underrated reasons to use a broker — we know which lenders are most generous for which client profiles.
Can the 5% Deposit Scheme increase how much I can borrow?
Yes — in two ways. First, the scheme eliminates LMI on a 5% deposit, which means more of your savings stay in your offset account or pocket rather than being absorbed in LMI costs (on a $1M property, that’s around $34,000 of additional buying power). Second — and less widely understood — 5% Deposit Scheme loans are typically offered at the same rates and lending policies as a borrower with a 20% deposit. Because the government guarantee covers the gap between your 5% deposit and the 20% LVR threshold, the bank treats the loan as effectively 80% LVR. This often results in a lower serviceability buffer rate compared to a non-scheme buyer at 95% LVR, which can meaningfully increase your borrowing capacity.
Ready to Know Exactly What You Can Borrow?
Book a free 15-minute consultation with Low Deposit Homes — Book your free call | Call 1800 920 172
We’ve helped 1000+ families work out their actual borrowing capacity across multiple lenders. The 15-minute consultation gives you a real number — not a calculator estimate — and the scheme structure that maximises what you can buy.
Low Deposit Homes operates under Winning Homes Australia Pty Ltd (ACN 633 321 758). All deposit calculations are indicative and based on general scenarios. Individual circumstances may vary. Government grant eligibility is subject to assessment by the relevant authority. This guide is for informational purposes and does not constitute financial advice.