Mozo guides

Can you afford an $800,000 home? Here’s how much you’ll need

A young woman standing in her kitchen, looking out the window with a hopeful expression.

The first step when buying a home is saving up for a home loan deposit. The first deposit is typically 20% of the property purchase price, so for an $800,000 home, you’ll typically be looking at a deposit of $160,000.

You’ll first want to compare home loans to set you off on the right foot – and ensure you won’t get stung by higher-than-average interest rates.

It’s also possible to make a deposit of 5% or 10% – but more on this in a moment.

On top of your initial deposit, you’ll also need to take into consideration upfront fees that are associated with buying a home. These can include:

Depending on which fees apply to you, these additional expenses can cost you hundreds or even thousands of dollars, so it’s important you factor them in. 

Keep in mind that if you’re buying a home for the first time, you may also be eligible to get stamp duty waived with your state or territory’s First Home Owners Grant (FHOG).

Then there’s the loan itself. Before approving your home loan, your lender will also assess your home loan borrowing power – that is, the amount of money they’re willing to give you.

Each lender has different criteria for determining your borrowing power, but you can get started by using our home loans borrowing calculator.

Let’s get into some numbers.

A woman is working out her finances with her phone’s calculator, a pen and paper.

How much deposit do I need to buy an $800,000 home?

As mentioned, a standard 20% deposit for an $800,000 home shakes out to be $160,000. A 20% deposit gives you a loan-to-value ratio (LVR) of 80%, which means you’ll likely have access to more competitive home loan interest rates than available to those with a deposit of 10% or less.

Now a 10% deposit would require you to save $80,000 while a 5% deposit would mean you only need $40,000. If you’re saving for a deposit of 10% or less, you can compare low deposit home loans in our database.

The catch with a low deposit home loan is that while you’ll need less money upfront, it’s highly likely you’ll end up paying more than you would have in interest due to your higher LVR.

On top of that, you’ll need to take out Lenders Mortgage Insurance (LMI) if your initial deposit is under 20% of the property’s price. If you don’t have a 20% deposit and you want to avoid paying LMI, there are ways to work around it, including:

How much do I need to earn to buy an $800,000 home?

You can work out how much you need to earn to purchase an $800,000 home in Australia by calculating your monthly repayments and seeing how it stacks up against your income.

Let’s run through an example – you buy an $800,000 home with a 20% deposit, so your home loan will be $640,000. In this example, let’s say you’re an owner-occupier paying principal and interest, and your loan term is 25 years at the average variable interest rate of 6.83% p.a. (according to the Mozo database).

Using our mortgage repayment calculator, we can see that your monthly instalment on a $640,000 home loan would be $4,454. So how much do you need to earn to comfortably pay it off?

It’s widely understood that homeowners who are spending more than 30% of their pre-tax income on their home loan are under mortgage stress, which means you’d need to earn at least $14,846.67 pre-tax each month to stay below the mortgage stress threshold.

That works out to be an annual income of $178,160.04 in order to comfortably pay off your mortgage. If you were to split that down the middle, two people would need to be earning $89,080 each year.

However, don’t be disheartened if you don’t meet this standard. Banks and lenders take into account many factors when assessing how much money they will let you borrow, not just how much you earn. Some of these include:

  • Your expenses and spending habits
  • Your existing debt (if any)
  • Your savings over time
  • The security of your job

Note there are many more contributing factors your lender will take into account.

When lenders scrutinise these aspects of your life, they are assessing your home loan serviceability. This term describes how lenders stress test your ability to pay off a mortgage over time. Lenders will also add a 3% serviceability buffer in this process, which is a way to account for potential future rate hikes.

What can I actually buy with $800,000?

Given the interest rate rises Australians have been faced with over the past two years, what can $800,000 actually get you in today’s property market? 

As an example, CoreLogic ’s housing data for April 2024 found the median value of a home in Melbourne is just below $779,000, while Brisbane currently has a median value of about $817,000.

Taking a closer look at Melbourne, we can see that the median price of a unit in the inner city suburb of Fitzroy is $791,000, according to Domain’s House Price Report for December 2023. Moving to the outer suburbs, the median price for a house in Seaford is $792,500, for example.

Moving up to Queensland and to Brisbane’s coastal suburb of Brighton, the median house price is sitting right at the threshold of $800,000. Or if you’re in the market for a unit, Mermaid Beach on the Gold Coast also has a median price of $800,000.

Is there any hope for Sydneysiders? The good news is there are pockets across the city where units and homes can be found at your desired price point. Sydney’s Inner West suburb of Petersham has a median unit price of $800,000 according to Domain’s data, while the south-western suburb of Ingleburn also has a median price of $800,000.

Ready to assess your borrowing power or work out what your mortgage repayments might be? Take a look at Mozo’s calculators below.

Jasmine Gearie
Jasmine Gearie
RG146
Senior money writer

Jasmine joined Mozo from TechRadar Australia, where she covered the telco and NBN sector for over four years. She’s now turned her attention to the world of personal finance, with a special interest and expertise in home loans and savings accounts. Jasmine studied a Bachelor of Communication (Journalism and Public Relations).


* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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