Can I Afford a House on $180K? (2026)

First things first: having an $180,000 salary is a solid foundation, but the housing market in 2026 is tough. When we talk about borrowing power, we aren't just looking at your salary; lenders assess your income, debts, and expenses. Based on current interest rates (around 6.2%), someone earning $180,000 could realistically borrow between $1.1 million and $1.3 million, depending on your existing debts. This figure represents the maximum loan amount the bank is willing to give you. Given the median prices in 2026 (Sydney at $1.4M, Melbourne at $950K), your target price range is significantly influenced by location. You might be looking at properties priced between $800,000 and $1.1 million in most major capital cities, putting Sydney out of reach for a first-home purchase without significant assistance.

The deposit is your down payment, and the percentage you save dramatically affects your borrowing power and costs. We generally look at three scenarios: a 5% deposit, 10% deposit, and the ideal 20% deposit. If you aim for a 20% deposit, you significantly reduce or eliminate Lender's Mortgage Insurance (LMI)—a costly fee that protects the bank if you default. For a $900,000 home (a realistic mid-range target), a 20% deposit means a $180,000 deposit, resulting in monthly repayments of around $6,200 per month. If you only manage a 5% deposit, your repayments remain similar, but you'll face LMI and potentially need to spend more on stamp duty. To run through the exact numbers and see how different deposit sizes impact your payments, use our mortgage calculator. Remember, paying for a deposit is a marathon, which is why reading up on saving for your house deposit is crucial.

The location you choose is perhaps the most critical factor. In 2026, buying in Sydney ($1.4M) or Melbourne ($950K) will require a higher deposit and potentially more complex financing. However, if you look at cities like Brisbane ($850K), Perth ($750K), or Adelaide ($780K), the math becomes much more manageable. A $750,000 home in Perth, for example, makes a 20% deposit ($150,000) achievable and keeps your required repayments within a comfortable percentage of your $180,000 salary. For a more affordable entry point, regional areas offering homes between $500,000 and $600,000 provide excellent value. Always use our affordability tool to check the real-time figures for specific suburbs.

Don't get discouraged if the numbers seem tight. There are ways to boost your financial standing for the bank. First, check if you qualify for first home buyer grants or stamp duty concessions—these can save you tens of thousands of dollars. Secondly, improving your credit score is vital, as it signals reliability to lenders. Thirdly, paying down non-mortgage debt (like car loans or credit card balances) dramatically increases your perceived income, thereby boosting your borrowing power. We recommend reviewing your current financial situation to ensure you are budgeting effectively. If you want a broader look at financial health, check out our guide: Am I doing well on an $180k salary? Finally, always use our borrowing power calculator to get a professional estimate before talking to a mortgage broker.

Q: Do first home buyer grants help with the deposit?

A: Grants typically assist with stamp duty or land transfer fees, which can save you thousands of dollars upfront. They do not usually count towards your required cash deposit, but they significantly reduce your initial out-of-pocket costs.

Q: What is the difference between borrowing power and budget?

A: Borrowing power is the maximum amount the bank *allows* you to borrow. Your budget is what you can *comfortably* afford while still saving money for other living costs, emergencies, and lifestyle.

Q: Is a 5% deposit really okay?

A: While possible, a 5% deposit requires you to pay Lender's Mortgage Insurance (LMI) and means you are taking on higher risk for the lender. Aiming for 10% or 20% is always financially safer.