Can you afford a $600,000 home? Here’s how much you’ll need to get started

Australia’s housing market can be challenging, and you might think buying a home for $600,000 is almost impossible, but property can still be found at this price in our regional areas, and even our cities if you’re looking to buy a small apartment.

We’re examining how much money you need to save up for a deposit on a $600,000 home and how much you need to earn to easily afford your repayments. Plus, we take a look at some lesser-known home loan costs you may not know about.

• A 20% deposit on a $600,000 home loan is $120,000

• You would need to be on a salary of $122,200 to afford a $480,000 home loan

• The monthly repayment on a $480,000 home loan is $3,055 (with average interest rate of 5.87% p.a. in the Mozo database on 29 September, 2025 †)

You need to put down a deposit before buying a home. A home loan deposit is typically 20% of the property’s purchase price, so you’ll ideally have a deposit of $120,000 to buy a $600,000 home.

A 20% deposit gives you a loan-to-value ratio (LVR) of 80%, because you’re taking out a loan that is 80% of the property’s value.

There are lenders that accept deposits as little as 5-10%, and these first home buyer loans can help you break into the market sooner – but there are caveats. Having a smaller deposit and a higher LVR means banks may charge you a higher interest rate because you’re seen as a riskier borrower.

Deposit amount on a $600,000 home loan

• 20% deposit – $120,000
• 10% deposit – $60,000
• 5% deposit – $30,000

If you only have a deposit of 5-10%, most providers will also charge you lenders mortgage insurance (LMI) on top of your loan, increasing your overall costs. This is why it’s so important to look for the best home loans and find a low rate, as it could help you save thousands.

If you’re finding it difficult to save up for a 20% deposit, here are strategies to avoid paying LMI:

• Check your eligibility for a first home owner grant
• See if you’re eligible for the Home Guarantee Scheme
• Ask someone to go guarantor on the home loan
• Use a cash gift as part of (or all of) your deposit

Depending on the loan or lender you choose, there’s a range of costs you might have to pay for including fees from your bank and government charges. Here are some examples:

• Application fees
• Settlement fees
• Conveyancing fees
• Property valuation fees
• Stamp duty (if applicable)

These fees can run into the hundreds or even thousands of dollars, so consider them as part of your overall costs of a home loan.

If you’re buying a home for the first time, you may be eligible for a concession or exemption from stamp duty. Check our guide to the First Home Owner Grant for more information, or head to your state or territory government’s website.

If you’re buying a home for $600,000 with a 20% deposit, you’ll need to take out a $480,000 loan.

As an example, let’s say you’re an owner-occupier paying principal and interest, and your loan term is 25 years. We’ll assume an average variable interest rate of 5.87% p.a.† (as at 29 September, 2025).

By using our mortgage repayment calculator, we can work out the monthly repayment on a $480,000 home loan is $3,055.

† Source: Mozo database on 29 September, 2025. Average home loan variable interest rate for owner occupiers with a 20% deposit (80% LVR), making principal and interest repayments on a $500,000 loan over 25 years.

Once you know your monthly repayment, you can work out how much you need to earn to manage your mortgage – our borrowing power calculator is a good place to get you started.

If you’re spending more than 30% of your pre-tax income on your home loan, you would generally be considered under mortgage stress. That means you’d need to earn at least $10,183 pre-tax each month to manage a $480,000 mortgage without strain.

If you’re managing the mortgage on a single income, you’d need to be earning approximately $122,200 pre-tax each year. If you’re buying as a dual income household, two people would both need to be earning at least $61,100 every year.

It’s still possible to be approved for a home loan without meeting these income benchmarks. Lenders consider your income alongside several other factors before determining how much money they’ll let you borrow – these can include:

• Your expenses and spending habits
• Your existing debt (if any)
• Your savings over time
• Your job security
• Any dependents you have, and how many
• Any assets you have (car, valuables, shares, other property)

Put together, these factors are what lenders use to assess your borrowing power and home loan serviceability, which is your ability to pay off a mortgage over time. Banks add a 3% buffer to their interest rate when assessing your application as a way to test if you can still cover your repayments if interest rate rises were to hit.

There’s only one capital city in Australia with a median dwelling value below $600,000, and that’s Darwin according to Cotality’s Home Value Index for August 2025.

That doesn’t mean it’s impossible to find property at this price in the capitals, but you may have more luck looking for units, or by venturing to the outer suburbs.

If you want to buy a house for $600,000, you’re more likely to find success in regional areas. Cotality’s housing data reveals that the median value of our combined regional areas is $693,859 in August 2025.