How Much Percentage of Income Should Go to Mortgage?

Determine your mortgage payment percentage

Choosing a healthy portion of your income for mortgage repayments is crucial for long-term financial wellbeing. Using recognised financial guidelines helps you avoid overstretching while maintaining a comfortable lifestyle. Key framework for budgeting:

• Mortgage payment guideline: Your repayments should sit within a reasonable share of your gross income.

• Total debt guideline: All debt obligations combined should remain within a manageable range.

• Flexible, not fixed: The best percentage depends on personal circumstances, lifestyle choices, and unexpected expenses.

Sticking to balanced ratios protects your cash flow and reduces stress. HeyNest brokers use these benchmarks to structure a loan that remains affordable and sustainable for your household.

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The role of Debt-to-Income ratio (DTI) in Australian lending

Australian lenders evaluate how much of your income can responsibly go toward a mortgage by analysing your Debt-to-Income ratio and overall servicing capacity. This is part of responsible lending obligations designed to protect borrowers. What lenders assess:

• Debt-to-Income ratio: How your total debt commitments compare to your income.

• Stress test: Your capacity to repay if interest rates increase.

• Living expenses: Benchmarks like HEM help measure genuine disposable income.

This assessment determines how much you can safely borrow. HeyNest connects you with brokers who clarify your DTI and forecast what lenders will approve.

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Beyond the percentage: personalising your mortgage repayments

While guidelines provide a useful starting point, the most sustainable mortgage percentage is based on your individual goals, lifestyle needs and capacity to adapt to future changes. Factors to customise your repayments:

• Deposit size: A larger down payment lowers your loan amount and repayment percentage.

• Financial goals: Savings plans and lifestyle choices influence how much you should allocate to housing.

• Repayment buffer: Making extra contributions or using flexible loan features protects against income changes or rate rises.

The smartest strategy balances affordability with financial resilience. HeyNest brokers tailor loan structures to fit your budget and long-term goals, ensuring your mortgage supports your life, not limits it.

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Frequently asked questions

Is the 28/36 rule mandatory for getting a mortgage?

No, it is a general guideline used by financial experts, but lenders in Australia use more specific DTI and servicing capacity tests.

Does the percentage change if I earn a very high income?

Possibly. Lenders may allow a higher percentage for high-income earners who still demonstrate significant disposable income after all expenses.

What if I want to pay my mortgage off faster?

You can choose to allocate a higher percentage of your income to repayments, which must be factored into your budget to ensure it remains comfortable.