How much can I borrow on a $400,000 salary in Australia 2026?

Australian banks and mortgage lenders calculate your maximum home loan by working out your Uncommitted Monthly Income (UMI) — the money left over after tax and living expenses that's available to service a mortgage. Here's exactly how lenders calculate that figure on a $400,000 gross salary:

Why your $400k salary gives you $2,280,000 in borrowing power

The APRA 3% serviceability buffer is the single biggest constraint. Without it, on a $400,000 income you'd theoretically borrow $2,960,000+ — but the buffer ensures lenders only approve what you can comfortably repay if the home loan interest rate rises to 9.14%. This protects both borrowers and Australia's financial system from overleveraging.

The HEM benchmark for your income level is $3,940/month. This covers basic food, clothing, transport, utilities, and essential household costs. It does not include private school fees, overseas travel, dining out, or subscription services — if your genuine expenses are higher, lenders use that figure instead, which reduces your maximum mortgage accordingly.

Your $400,000 salary is the starting point, but these four variables have the biggest impact on whether you land at $1,940,000 or $2,620,000 when applying for a home loan in Australia:

Not all Australian lenders apply the same HEM tables or mortgage credit policies. On a $400,000 income, the gap between the most and least generous lender can exceed $410,000. Here's how 8 major lenders compare for top-tier income earners:

On a $2,280,000 home loan at today's 6.14% variable rate, your estimated monthly mortgage repayment is $13,876. Here's how that changes with interest rate movements — and what extra repayments could save you over the life of the loan:

Extra repayments: paying $500/month extra

Making extra repayments of $500/month on your $2,280,000 home loan could save approximately $295,176 in interest and pay off your mortgage 2.8 years earlier. Most Australian variable rate home loans allow unlimited extra repayments without penalty — an offset account is another effective strategy, reducing interest daily without locking away funds.

LVR and Lenders Mortgage Insurance (LMI)

Your Loan-to-Value Ratio (LVR) is the proportion of the property's value covered by the loan. With a $2,280,000 mortgage and $80,000 deposit, your LVR is approximately 96.6%. An LVR above 80% triggers Lenders Mortgage Insurance (LMI) — a one-off premium protecting the lender, not you. To avoid LMI on a $2,280,000 loan, you need a deposit of at least $570,000.

Stamp duty on a $2,360,000 property

Buying a property worth approximately $2,360,000 — the estimated purchase price with a $2,280,000 mortgage and $80,000 deposit — will attract stamp duty costs that vary significantly by state. Victorian buyers pay around $130,000, while Queensland buyers pay around $106,000. First home buyers in most states receive concessions or full exemptions on stamp duty up to certain thresholds.

If your borrowing estimate of $2,280,000 isn't enough for your target property, here are the most effective strategies for top-tier income earners earning $400k to increase their mortgage borrowing capacity before applying:

1. Reduce or close credit card limits

This is the fastest win. Request a credit limit reduction (or full closure) on cards you rarely use. Lenders treat 3.8% of your total limits as a monthly obligation — a $20,000 reduction in credit limits adds approximately $95,000 to your home loan borrowing power. Allow 30–60 days for the credit bureau to update before applying.

2. Pay down HECS-HELP debt

On $400,000, your HECS repayment rate is 8% of gross income. Voluntarily paying down HECS before applying reduces your assessed monthly commitments directly. Unlike the old bonus for voluntary repayments, there's no discount now — but the UMI benefit is real and can unlock tens of thousands in additional mortgage capacity.

3. Apply with a co-borrower

A joint home loan application combines both incomes and can push borrowing capacity well beyond $2,620,000. Even a second income of $40,000–$50,000/year adds approximately $30,000–$80,000 to the combined borrowing power, subject to shared debts and living expenses.

4. Choose a more generous lender

Non-bank lenders like Macquarie, ING, and Reduce Home Loans apply less conservative HEM tables than the Big 4. The difference on a $400,000 salary can be $340,000+ in additional borrowing capacity. A mortgage broker can access policies across 30+ lenders to find the best fit for your income profile — without impacting your credit score.

5. Use an offset account from day one

An offset account linked to your home loan reduces the interest calculated daily. On a $2,280,000 mortgage, keeping $20,000–$30,000 in an offset saves approximately $3,000 in interest per year. Over 30 years, this compounds significantly — and unlike extra repayments, the funds remain accessible.

6. Pre-approval: lock in your borrowing capacity

Getting a mortgage pre-approval before property hunting locks in your assessed borrowing capacity with a specific lender for 3–6 months. This gives you confidence at auction, protects against rate changes during your search, and signals to vendors you're a serious buyer. Chat with Finley for a digital pre-qualification across 22 lenders in minutes — no credit check required.