Average Percentage of Income Spent on Mortgage | 2025 Data

Understanding Australia’s mortgage to income benchmark

Knowing how much Australians typically spend on repayments helps you decide whether your mortgage is sustainable. This benchmark offers a baseline for budgeting and helps identify when a loan may strain your finances. What the benchmark represents:

• A guideline for affordability: A typical proportion of income is used to avoid mortgage stress.

• Debt considerations: Lenders also assess total debt obligations to measure financial capacity.

• Context matters: Income level, location, and market rates influence what’s considered “normal.”

Because real affordability varies from person to person, HeyNest brokers analyse your situation against industry benchmarks and help you choose a mortgage aligned with your financial reality.

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Factors that change your ideal mortgage percentage

Your best repayment percentage isn’t fixed, it depends on your full lifestyle, current commitments and financial goals. Following the average alone can lead to overcommitting if your circumstances differ. What influences your personal percentage:

• Other debts: Student loans, credit cards or personal loans reduce available income.

• Dependents: A larger household increases essential spending.

• Future interest rates: Your percentage must remain comfortable even if rates rise.

• Savings and lifestyle goals: Affordability includes preserving your quality of life and ability to save.

A personalised strategy is essential. HeyNest brokers evaluate these factors and match you with lenders that support a safe repayment level for your situation.

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Calculating your sustainable mortgage repayment threshold

Determining your own repayment limit is more important than following a national average. Your sustainable threshold must withstand financial changes while supporting long-term goals like savings and security. How to find your true threshold:

• Start with net disposable income: Assess what remains after essential expenses.

• Work within a safe range: Choose a repayment level that leaves room for savings and flexibility.

• Stress-test your budget: Ensure you could handle higher repayments if rates increase.

• Consider extra costs: Loan insurance and fees can alter your repayment percentage.

HeyNest connects you with experts who calculate this threshold for you and help secure a loan designed to protect your financial resilience, not just meet lender minimums.

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Frequently asked questions

Is 30% of gross income the strict rule for mortgage spending in Australia?

It's not a strict rule, but a guideline. Many experts and lenders consider exceeding 30% of gross income on housing costs as an indicator of potential housing stress.

How does a variable interest rate affect the percentage of my income spent on the mortgage?

Variable interest rates can significantly increase your monthly payments, forcing an upward trend in the percentage of income spent on the mortgage. This is why budgeting with an interest rate 'buffer' is vital.

Do Australian lenders use net or gross income to assess mortgage affordability?

Lenders primarily use your gross income (before tax) to calculate your initial borrowing capacity, but they also apply living expense criteria that reflect your real net income situation.