Can I Afford a $400K House?

Thinking about a $400,000 house in 2026? It’s a big number, so let’s break down exactly what it means for your budget. This price point is common for entry-level homes or units in regional Australian centres, or perhaps a smaller block in a major metro area. To figure out if you can afford it, you need more than just knowing the price; you need to understand your financial capacity. Based on current market trends and anticipated interest rates, we recommend checking out our affordability tool first. Generally speaking, to service a $400,000 mortgage (assuming a decent deposit), you should aim for a stable income that keeps your total repayments manageable, ideally representing no more than 25-30% of your gross income.

For the purposes of this guide, we'll assume a competitive interest rate of approximately 6.2% over 30 years. This estimate is crucial because interest rates are the biggest wild card in property buying. Keep in mind that this analysis provides a strong estimate, but your lender will perform a thorough assessment of your income and expenses, known as 'servicing.'

The deposit is your entry ticket, and how much you save directly impacts your loan costs. For a $400,000 property, your deposit options range from 5% ($20,000) to 20% ($80,000). While a 5% deposit gets you in the door, it comes with significant costs, most notably Lender's Mortgage Insurance (LMI). LMI is an insurance premium that protects the bank if you default, and it can add thousands to your initial outlay. This cost is avoided if you secure the full 20% deposit.

If you are making the jump to home ownership, understanding the deposit structure is step one. We have put together a detailed guide on how much deposit you really need. Remember, the higher your deposit, the lower your monthly repayments and the fewer extra fees you’ll pay.

Let’s run the numbers. Assuming a 30-year loan term and a 6.2% interest rate, a $400,000 mortgage requires estimated monthly repayments of approximately $2,750. This figure is your baseline, but remember it doesn't include rates, council fees, or maintenance. To keep your repayments at a comfortable 30% of your gross income, you would need a minimum gross annual salary of around $100,000 to $110,000. This tells you the salary bracket you should be aiming for to comfortably manage the loan.

If you are trying to calculate your personal servicing capacity, use our mortgage calculator. This tool will help you model different loan amounts and interest rates. If you suspect your deposit is low, always use our LMI calculator to accurately budget for those extra upfront costs.

The good news is that the Australian government and state governments often provide incentives to help first-time buyers. Always research first-home-buyer grants and concessions for 2026, as these can significantly reduce your upfront costs. These grants can range from lump sum payments to reduced stamp duty, depending on your state and income level. Furthermore, if you are a first-home buyer, you may also be eligible for specific first home buyer concessions.

Where are these $400,000 properties found? In 2026, you might find median prices around this level in regional centres like parts of Geelong (VIC), Sunshine Coast (QLD), or certain areas of Western Sydney. However, prices vary wildly, so don't rely on a single city's average. It's vital to do local research and plan for unexpected costs, like stamp duty and conveyancing fees, which can easily add $10,000 to your total purchase price.