To borrow $1,200,000, a couple with no other debts needs about $256,000 combined, and a single applicant about $267,000. That is at the 6% example rate, assessed at 9% over 30 years. At this size a couple needs less income than one person, because two tax-free thresholds keep more of each dollar. Repayments are about $7,195 a month.

Income needed for a $1,200,000 loan
Household Income needed Monthly test at 9%
Couple, no debts, no children About $256,000 combined $9,655
Single, no debts About $267,000 $9,655
Couple, two children About $274,000 combined $9,655

Why does a couple need less income than a single applicant here?

A single person earning $267,000 pays the 45% rate on everything above $190,000. Two people sharing the same total each stay in lower brackets, so the household keeps more after tax. At small loans the couple’s higher living allowance outweighs this. From about $900,000 the tax effect wins.

What does a $1.2 million loan buy?

With 20% down, $1,500,000. With 5% under the 5% Deposit Scheme, about $1,263,000, which is within the $1.5 million Sydney cap, plus full duty of about $51,000. That is the price range of many houses in Sydney’s middle ring and larger apartments closer in.

Does APRA’s debt-to-income limit apply?

At about $256,000 combined, a $1.2 million loan is about 4.7 times income, under the six-times level APRA watches. Existing debts count in that ratio too: a car loan or another mortgage can push a household over six times income even when the calculator says yes.

Which income do lenders count at this level?

  • Base salary in full.
  • Bonuses and commission, usually averaged over two years; see overtime and allowances.
  • Rent from an investment property, usually at about 80%.
  • Business income from tax returns; see self-employed lending.

What are the repayments on a $1.2 million loan?

  • At 6% over 30 years: $7,195 a month, or about $3,321 a fortnight.
  • At 6% over 25 years: $7,732 a month.
  • At the 9% rate lenders test: $9,655 a month, the figure your budget is checked against.

What price and deposit go with a $1.2 million loan?

The same loan buys a dearer home with a bigger deposit, and the duty grows with the price.

Price and duty behind a $1.2 million loan
Deposit Price Duty, most buyers Duty, eligible first home buyer
5% ($63,000) $1,263,000 $51,029 $51,029
20% ($300,000) $1,500,000 $63,787 $63,787

How does a HECS debt change the income needed for $1.2 million?

Compulsory HELP repayments come out of your pay, so the lender counts them as a commitment. On 2026-27 rates a single applicant with a HECS debt needs about $354,000 instead of $267,000 for a $1.2 million loan. See HECS-HELP repayment thresholds.

What if your income is below the figure?

  • Clear unused card limits first: a $10,000 limit closed is worth about $11,000 of income.
  • Add a second applicant: a couple needs about $256,000 combined.
  • Borrow less: each $50,000 less on the loan lowers the single income needed by about $12,000.
  • A family guarantee covers the deposit, but your income still has to carry the loan.

Does a shorter loan term change the income needed?

Yes. Over 25 years instead of 30 the repayments are higher, so a single applicant needs about $279,000 rather than $267,000 for the same $1.2 million, and the repayment rises to $7,732 a month at 6%.

What else does a lender check besides income for a $1.2 million loan?

  • Your deposit and where it came from; see genuine savings.
  • Your credit file, including repayment history.
  • Living costs, as the higher of what you declare and a benchmark.
  • Whether the property suits the lender: some limit loans on units under 50 square metres; see small apartment home loans.

Nearby loan sizes: the income needed for a $1 million or a $1.5 million home loan. The borrowing power calculator starts from your own income instead.

Questions people ask

What salary do I need for a $1.2 million mortgage?

About $256,000 combined as a couple, or $267,000 single, with no debts on our assumptions.

What are the repayments on $1.2 million?

About $7,195 a month at 6% over 30 years. See repayments on a $1.2m home loan.

Can a couple on $130,000 each borrow $1.2 million?

Yes on our assumptions: $260,000 combined reaches about $1,224,000 with no debts or children.

Do children change the figure much?

Two children lift the income needed to about $274,000 combined, because lenders add a living allowance for each dependant.

Charles Touma tests a $1.2 million loan across lenders, including how each treats bonuses, rent and existing debts. A free 30-minute call covers your borrowing. General information only, not credit advice. Lender policies change, and your own circumstances decide what suits you.

Sources: APRA, serviceability buffer; APRA, debt-to-income limit; Housing Australia, 5% Deposit Scheme price caps, checked 27 October 2026.

General information only, not credit, legal or tax advice. Your situation is assessed properly before any recommendation. Government scheme details change; figures are current at the time of writing.