Links Property Finance · Home loans for first home buyers: Income Needed for a $700k Home Loan

The gross income that leaves enough surplus, on our calculator assumptions, to cover about $5,630 a month at 9%.

Illustration only. Each lender applies its own expense benchmark, buffer and income policy.

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Illustrative example, not a client. A couple earns $105,000 full-time and $58,000 part-time, three days a week, with no debts and no children. Their combined $163,000 leaves about $10,800 a month after tax and the Medicare levy, with each income taxed on its own.

The lender allows about $4,180 a month for living costs and treats 85 per cent of what is left, about $5,640, as available for repayments. At the 9 per cent assessment rate that services about $701,000 over 30 years, just over the line.

A $300 a month car loan would bring it to about $670,000, which is why small debts matter at this size. Lenders differ on part-time income: most want it regular, on payslips and past probation.

With a 5 per cent deposit under the 5% Deposit Scheme, $700,000 of borrowing supports a purchase of about $735,000. A buyer who is not eligible would pay about $27,000 in duty at that price.

The deposit is about $37,000 plus legal and other costs, there is no LMI, and an eligible first home buyer pays no NSW transfer duty because the price is under $800,000.

With 20 per cent down the same loan supports about $875,000, inside the first home buyer concession band, so an eligible buyer pays about $14,700 in duty instead of about $33,600.

In between, a 10 per cent deposit on about $778,000 brings LMI unless a guarantor or a professional waiver applies. The stamp duty calculator and the deposit calculator work any price.