How much can you afford to spend on a home?

• What you can afford to spend on a property depends on what you earn, your savings for a deposit and your current expenses.
• When considering how much you can afford, future planning is key as it impacts your current affordability.
• Use a tool to help you get an idea of how much you can afford to spend on a new property based on your current and future scenario. 

Whether you’re buying your first or third home, knowing your affordability that includes all areas of your budget is essential to help avoid overspending and future financial strain.

The maximum amount a bank is willing to lend you is not necessarily the amount you should borrow as your true household budget will truly reveal what you can afford.

Knowing this amount along with factoring in your future plans will help get you started on the right foot with buying a property in an affordable price range.

Planning for your future

An overview of your current budget will give you a good idea of the home loan you can afford right now, so it’s important to factor in any future plans as life changes can change your current affordability.

If you plan on having children, buying a few new cars or even changing careers, you’ll want to factor these additional expenses and changes to your income into your current affordability. Also, factoring in your future overseas holidays will also have an impact.

Although you can’t predict the future, leaving some breathing room when planning to buy a large purchase will help you better set yourself up financially. That way you can enjoy your new home, rather than worrying about how you can afford to pay for it in the future.

Finding your affordability

Work out how much you can afford to spend on your first or next property purchase shouldn’t be difficult.

We’ve set up our affordability tool that allows you to customise your current and future life scenarios and get an idea of how much you could afford to spend on your property purchase.

The tool allows you to enter your income, savings for a deposit, then gives you the options to customise your current scenario including expenses and any debts even further for a more accurate affordability estimate.