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Borrowing power

Links Property Finance · Home loans for first home buyers: How Much Can I Borrow on $120k?

A single applicant on $120,000 with no debts reaches about $530,000 on our calculator assumptions. That is a Sydney apartment with a reasonable deposit, and a house with a partner’s income added.

Reviewed by Charles Touma Updated 18 October 2026

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How much can you borrow on $120,000 a year?

At $120,000 you are still in the 30 cent tax bracket, so about $7,590 a month reaches your account.

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The living expense benchmark a lender applies rises a little with income, to about $2,560, leaving a surplus of roughly $5,000, of which 85% is counted for repayments. At the example rate plus the 3% buffer that services about $530,000.

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This income is where the decisions start to matter more than the salary: a HECS balance, a lease on a car, or a second child can each move the figure by more than a pay rise does.

Part of the first home buyer loans guide.

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Your own figure on $120,000

How much could you borrow?

$120,000
None

What moves the number

Choose any that apply. Each shows roughly how much it changes the figure, the way a lender’s assessment would.

$530,000

is an indicative borrowing figure at today’s typical rates. Lenders typically count around 80% of rental income, which is why an investment purchase can lift your number, your real figure comes from a proper assessment.

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Charles at Links Property Finance made buying our first home so much easier than we expected. As first home buyers, we had a lot of questions around borrowing capacity, our deposit and the different government schemes available to us. Charles explained everything clearly, compared different lenders and kept us updated throughout the whole process. He was always easy to reach and made sure we understood what was happening from pre approval right through to getting our home loan approved. We would definitely recommend Links Property Finance to anyone looking for a mortgage broker, especially first home buyers who want someone to guide them through the process.
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As a first home buyer, I was pretty overwhelmed at the start, but Charles made everything much easier. He explained the process step by step and helped me understand my borrowing options. His professionalism and responsiveness were excellent.
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What does the worked example show for $120,000, single, no debts?

From salary to loan figure on our calculator assumptions.

Gross income$120,000. Salary before tax.
Tax and Medicare levyAbout $28,900. Resident rates, no offsets.
Net income per monthAbout $7,590. After tax.
Living expenses allowedAbout $2,560. Single adult benchmark, scaled to income.
Surplus for repaymentsAbout $4,280. 85% of what is left.
Assessment rate9%. 6% example rate plus the 3% buffer.
Borrowing powerAbout $530,000. Serviced by $4,280 a month at 9% over 30 years.
Repayment at 6%About $3,180 a month. The actual repayment at the example rate.

Illustration only. Lender benchmarks, buffers and floor rates differ.

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What moves the $530,000?

A father holding a baby by the window
  • A partner on $60,000 adds roughly $260,000.Two incomes totalling $180,000 reach about $790,000 on the same assumptions, because the second income is taxed at lower rates and the living benchmark for a couple is less than two singles.
  • Each dependant lowers the surplus.Lenders add a monthly amount per child to the expense benchmark. Two children reduce borrowing by about $95,000 compared with the single figure.
  • A novated lease is a debt, whatever the payslip says.Salary-packaged cars reduce the gross income a lender uses and are often counted as a liability as well. On $120,000 a $900 a month package can cost $90,000 of borrowing.
  • HECS repayments scale with income.The compulsory repayment is larger at $120,000 than at $80,000, so the deduction before the lender sees your income is larger.
  • Bonus and overtime are counted, but discounted.Most lenders take 80% of a regular bonus or overtime with two years of history. Some take 100% for certain roles, which is why lender choice matters for shift workers and sales staff.

How do you get from the loan to the purchase price?

A $530,000 loan with a 5% deposit under the 5% Deposit Scheme supports a purchase near $560,000 with no LMI. With 20% down it supports about $665,000.

Both sit under the $800,000 NSW first home buyer duty exemption, so stamp duty is nil for an eligible first home buyer.

With a partner and a combined $790,000 of borrowing, a 10% deposit supports a purchase around $880,000, which is a house in many middle-ring suburbs and a larger apartment closer in.

Run the deposit calculator to match your savings to a price, and the stamp duty calculator for duty above $800,000.

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How do three $120,000 scenarios compare?

Same salary, different outcomes on our assumptions.

  • Single, no debtsAbout $530,000. Enough for an apartment in most of Sydney with a 10% to 20% deposit.
  • Single parent, one child, HECSCloser to $410,000. The child and the HECS deduction each take a slice.
  • Couple, $120,000 and $60,000About $790,000. A house becomes realistic in the middle and outer rings.

Common questions about borrowing on $120,000

What does a 20 per cent deposit change for a single buyer on $120,000?

An illustrative single radiographer on $120,000 with no debts can borrow about $530,000 on our calculator assumptions. After an inheritance they have $130,000, which is 20 per cent of a $650,000 two-bedroom apartment in a middle-ring suburb.

At 80 per cent of the price there is no lenders mortgage insurance and no government scheme to qualify for, so the choice of lender stays wide.

With 20 per cent down, most lenders do not ask for a history of genuine savings; the estate paperwork shows where the money came from. As a first home under $800,000, there is no transfer duty.

The $520,000 loan costs about $3,120 a month, and the lender tests it at about $4,180.

Apartment rules still apply, such as minimum sizes and building limits; see apartment home loans. This is an illustrative example, not a Links client: figures are rounded, at the 6% example rate over 30 years.

How much can I borrow on $120k?

About $530,000 as a single applicant with no debts on our calculator assumptions. The real figure depends on the lender’s expense benchmark, buffer and how it treats any bonus, overtime or HECS.

What if I have a HECS debt on $120,000?

Roughly $465,000 on our assumptions, depending on the balance and the repayment rate that year. Some lenders treat a small remaining balance more kindly if it will be cleared within a year or two.

What house can I afford on $120,000?

On one income, an apartment or a small house up to about $665,000 with a 20% deposit. With a partner the range extends to about $880,000. Both depend on the deposit as much as the income.

Does a novated lease reduce borrowing power?

Usually yes, twice over. The packaged amount reduces the taxable income a lender uses, and the lease payment is counted as a commitment. Ending the lease before applying can add tens of thousands to the loan.

Is a 2 or 3 per cent buffer applied?

Three percentage points above the actual rate is the standard serviceability buffer. A few lenders apply a lower buffer in specific refinance situations, not for purchases.

Can I borrow more with a longer loan term?

Rarely. A 30-year term is already the standard assumption, longer terms are seldom offered, and lenders often cap the term at retirement age, which can shorten it instead.

The borrowing power calculator takes your own income and expenses, and the HECS and home loans guide explains how the debt is treated.

Get a straight answer for your situation

Charles runs your income, commitments and deposit through the lenders that suit a $120,000 earner and tells you the price range to bid in. Free, no credit check.

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Charles Touma, mortgage broker at Links Property Finance
Reviewed by Charles Touma Director & Mortgage Broker · MFAA member · Credit Representative 579003 under ACL 389328 About Charles · First home buyers · MFAA register · ASIC register · Complaints processEvery page is reviewed by Charles before it is published and checked against current lender policy and the official scheme pages linked where figures appear.

General information only, not credit or financial advice. The figures are illustrations built on stated assumptions, not a quote or an assessment of your position. Lender policy, rates and assessment rules change and differ between lenders. Links Property Finance holds an Australian Credit Licence authorisation and can assess your actual borrowing power.

Official sources for the figures on this page: Revenue NSW, First Home Buyers Assistance Scheme. Scheme rules change; the official pages are the final word. Checked against these sources on 12 October 2026.