How the deposit calculator works

The question sounds simple: "I have $X saved — what's the most expensive property I can buy?" But it's circular, and can't be solved with a single formula.

Here's why. To find the maximum purchase price, you need to know the stamp duty — but stamp duty depends on the purchase price. You need to know whether LMI applies — but LMI depends on the loan amount, which depends on how much of your savings is left after stamp duty and registration fees. And LMI itself changes depending on the exact loan amount, which changes at every candidate price.

So the tool runs a binary search across candidate prices and finds the highest one that is viable. "Viable" means your savings cover the upfront costs and the resulting loan stays within the LVR ceiling.

Every mortgage application is subject to three independent limits. This tool calculates all three and shows whichever is lowest as your actual maximum.

Ceiling 1 — Deposit / LVR. How much can your savings buy after stamp duty, registration fees, and LMI? This produces both a maximum purchase price and a specific maximum loan amount.

Ceiling 2 — Debt-to-Income (DTI). APRA requires lenders to consider total debt against gross income. The practical cap at mainstream lenders is roughly 6× annual gross income across all debts. This produces a maximum new mortgage amount.

Ceiling 3 — Serviceability. Lenders must verify you can meet monthly repayments after living costs (HEM benchmarks) with a 3% interest rate buffer above the actual rate. This produces a maximum loan amount based on repayment capacity.

The key insight: savings apply at every ceiling. When Ceiling 1 is the binding limit, the calculation is straightforward — your savings determine everything. But when Ceiling 2 or 3 binds, your savings don't become irrelevant. The loan amount is capped, but your savings can still contribute deposit on top of that loan, pushing the achievable price higher. The tool runs the same binary search for all three ceilings: find the highest price where savings cover upfront costs plus the deposit component (price minus the loan cap).

Your maximum purchase price is the lowest of the three ceiling prices. For buyers with modest savings relative to income, Ceiling 1 is usually binding. For buyers with large savings but lower incomes, Ceiling 2 or 3 often binds — but the achievable price will still be higher than the loan cap alone suggests.

Loan-to-Value Ratio (LVR) is the loan amount as a percentage of the purchase price. Lenders impose maximums that vary by property type and whether you'll live there:

These are the practical market maximums at most mainstream lenders. Individual lenders may apply lower caps — particularly for apartments in high-density postcodes, or for borrowers with other risk factors. The tool uses these as the ceiling; your actual approval may be lower.

The LVR ceiling used in the binary search is the effective LVR — meaning after LMI is capitalised into the loan (added to the loan balance). This is the correct definition: you can't borrow at 95% and then add LMI on top and end up at 97%.

The tool evaluates candidate purchase prices and finds the highest viable one. Binary search means: start in the middle of a range, halve the range each iteration based on whether the mid-point is viable or not. 60 iterations resolves a $15M search range to within $1.

For each candidate price, computeAtPrice runs the full cost calculation — stamp duty, LMI, registration fees — and returns the result if the effective LVR stays within the ceiling, or null if it doesn't.

For each candidate price P, the calculation runs as follows. The inner loop resolves the circular dependency between LMI stamp duty and available deposit:

Why 6 inner iterations? The LMI stamp duty creates a circular dependency: LMI stamp duty reduces available deposit → changes loan amount → changes LMI premium → changes LMI stamp duty. Starting at lmiSd = 0, each iteration refines the estimate. In practice it converges within 3 iterations; 6 is conservative.

For states with no LMI stamp duty (NSW, ACT — 0% rate), there's no circularity and the loop exits in 1 pass.

Stamp duty (officially "transfer duty" in most states) is calculated fresh at every candidate price during the binary search. The brackets are hardcoded in the tool as of June 2026. Source: each state's revenue office, cross-referenced against AusCalcs.

NT quadratic formula (≤ $525,000):

Above $525,000: D = price × 4.95%. Source: NT Revenue. The coefficients are stored in the nt_duty_formula Supabase table so they can be updated without a code deploy.

VIC flat-rate band ($960k–$2M): This is not a marginal bracket — the duty is 5.5% of the full purchase price, not the marginal amount above $960k. It results in an abrupt drop in effective rate at $2M (where it switches to 6.5% marginal). This is the published VIC schedule.

What it is. LMI is insurance that protects the lender — not you — if you default on a loan with an LVR above 80%. You pay the premium, the lender is covered. The premium is typically capitalised into the loan (added to what you owe), which is how this tool models it.

When it applies. When the base LVR (before LMI is added) is above 80%. At exactly 80% or below, no LMI applies.

How the rate is looked up. The tool fetches the lmi_rates table from Supabase (75 rows: 15 LVR bands × 5 loan size bands). The matching row satisfies:

LMI premium = base loan × rate_pct / 100.

Source: Home Loan Experts indicative LMI rate table (May 2026). These are indicative rates — actual premiums are set by the insurer (Helia or QBE) based on the specific loan, lender, and borrower profile. Actual premiums may be higher or lower.

Capitalisation. LMI is added to the loan balance, not paid upfront. This is standard practice. The tool computes:

The effective LVR (not the base LVR) must be within the ceiling. This is the correct constraint: you can't borrow at 95% base and then add LMI to push effective LVR to 97%.

Several states charge stamp duty on the LMI premium itself. This is separate from, and in addition to, stamp duty on the property purchase price. The rates are stored in the lmi_stamp_duty_rates Supabase table:

LMI stamp duty is included in the binary search solve — it reduces your available deposit in the same inner loop as the LMI premium calculation. See Section 05 for the full algorithm.

It is also disclosed separately in the result breakdown so you can see its exact contribution.

Every property purchase involves two government registration fees: the title transfer fee and the mortgage registration fee. These are paid at settlement and come out of your savings before a dollar goes toward deposit.

Exact fee schedules are complex — fees are often tiered by property value or a fixed government charge. The figures used here are approximate totals per state and are stored in the registration_fees Supabase table (two rows per state: transfer + mortgage). NSW figures are exact ($165.40 each); other states are estimated pending verification.

Registration fees are small relative to the total purchase costs and are clearly labelled as approximate in the result. A future update will verify and correct all state figures.

Stamp duty brackets, LMI rates, LMI stamp duty rates, and registration fees are stored in Supabase lookup tables, not hardcoded in the tool. This means they can be updated — when rates change — without a code deploy.

This is not financial advice. GetReal is an information tool. The figures it produces are estimates based on publicly available data and indicative benchmarks. Before making any financial decision, speak with a licensed mortgage broker or financial adviser.

All three ceilings are estimates. Stamp duty is calculated from current state revenue office schedules. LMI rates are indicative. HEM figures are indicative benchmarks. Registration fees are approximate for all states except NSW. Actual costs depend on your lender, insurer, and specific circumstances.

LMI rates are indicative. Actual LMI premiums depend on the lender, insurer, property location, borrower risk profile, and loan features. The tool uses publicly available indicative rates; actual quotes may be higher or lower.

LVR ceilings are market maximums. Individual lenders may apply lower caps — particularly for high-density apartments, regional postcodes, or non-standard loan structures. The ceiling used here is the practical market maximum at most mainstream lenders.

NT FHOD phaseout is estimated. The exact NT First Home Owner Discount phaseout formula is not publicly documented. The tool models a linear phaseout between $500k–$650k. The actual figure may differ.

Off-the-plan, SMSF, and non-standard loans are not modelled. Different rules apply to self-managed super fund purchases, construction loans, and some off-the-plan contracts.

Conveyancer and legal fees are not included. Budget approximately $1,500–$3,000 for conveyancing on top of what this calculator shows.

After working out the deposit ceiling, the tool optionally shows the Household Expenditure Measure (HEM) — a living cost benchmark that banks use when assessing serviceability. This is part of Ceiling 3 (repayment capacity), not Ceiling 1 (deposit), but it's shown here so you can see the full picture in one place.

What HEM is. HEM is a standardised benchmark produced by the Melbourne Institute. Banks are required by APRA to use it as the minimum assumed living cost when assessing a mortgage application. If your actual declared expenses are lower than HEM, the bank will use HEM anyway.

How the tool looks it up. The tool fetches the hem_benchmarks Supabase table (14 rows) and matches on three dimensions:

The matching row returns a monthly dollar amount. If you entered a specific suburb, the tool determines metro vs regional using the postcode_locations table, which is sourced from the ABS ASGS (Australian Statistical Geography Standard) remoteness categories — capital city boundaries define metropolitan, everywhere else is regional.

What the tool shows. It combines your monthly loan repayment at the bank stress rate (current rate + 3% APRA buffer) with the HEM benchmark to show a combined minimum monthly income requirement. This is the floor the bank starts from — your actual approved borrowing capacity will depend on your declared income, other debts, and how the lender assesses your specific situation.

Source: HEM figures are indicative benchmarks sourced from JMD Mortgages (March 2026). These are not the Melbourne Institute's published figures (which are not publicly available) — they are indicative equivalents used by mortgage brokers for initial planning. Treat as directional, not definitive.

When the tool flags your debt-to-income ratio, it uses 6× gross annual income as the threshold. Here's why — and why that number is more nuanced than it looks.

What the 6× rule actually is. APRA's DTI rule (effective 1 February 2026) is not a per-borrower hard ban. It's a portfolio-level quota: banks cannot write more than 20% of their new residential mortgage lending at DTI ≥ 6× in any quarter. A borrower at 6.5× can still be approved — their application just consumes the bank's limited high-DTI quota for that quarter. There is no statutory individual limit anywhere in Australian lending law.

Why individual caps are higher — but hidden. Individual lender hard caps, communicated through broker channels rather than published publicly, are typically higher than 6×. Based on verified broker documentation and lender credit guidelines current as of July 2026:

ING, Suncorp, BOQ, Bendigo, AMP, ME Bank, St George, and Bankwest do not publish individual caps. They manage DTI exposure through internal credit policy and their APRA quota.

Non-banks are exempt entirely. APRA's DTI quota only applies to authorised deposit-taking institutions (ADIs). True non-banks — Pepper Money, Liberty Financial, La Trobe Financial, Athena — are not ADIs and are not subject to the 6× portfolio rule. They assess high-DTI applications case by case. ADI-backed digital lenders (Unloan, which is a CBA subsidiary; Tic:Toc / Tiimely, backed by Bendigo Bank) count within their parent's quota.

So why show 6×? Because it's the most defensible public threshold we can show without misrepresenting the rules. Above 6× DTI, you are in territory where:

• Your application consumes an ADI's limited high-DTI quota — if that quota is full, you're declined regardless of creditworthiness
• Most mainstream lenders will refer your application to credit department for manual review
• Your LVR ceiling may drop (Macquarie's 80% cap above 6× is an example; others may apply similar rules internally)
• You will likely need a specialist broker and possibly a non-bank lender, which typically means a higher interest rate

Showing 7× or 8× as the limit would imply a degree of certainty that doesn't exist — those caps vary by lender, aren't publicly confirmed for most, and can change without notice. 6× is the one number APRA has published, attached a quota to, and which the market has organised itself around.

What counts as debt. Credit card limits are counted in full — not your balance, your limit. A $20,000 credit card limit you never use still adds $20,000 to the DTI numerator at every Australian lender. Personal loan and car loan balances, and existing mortgage balances, are included. HECS/HELP debt was excluded from DTI calculations at most lenders from 30 September 2025 — it still reduces your assessed income in serviceability calculations, but it no longer sits in the numerator.

This tool's DTI ceiling is Ceiling 2. It sits between your deposit ceiling (Ceiling 1 — what your savings can reach) and your serviceability ceiling (Ceiling 3 — what your income can repay each month). All three need to clear for a loan to proceed. Whichever is lowest is the one that binds you.

Ceiling 2 answers: given your income and existing debts, what's the highest property price you can reach when the APRA DTI threshold caps your loan?

What the tool collects. Your existing debts (credit card limits in full, personal and car loan balances, other mortgage balances) and your gross annual income. If the purchase is an investment, the tool also asks for expected weekly rent and applies 80% of that as additional assessable income — the standard lender shading for rental income.

Step 1 — find the loan cap.

Step 2 — find the max price using your savings. The loan cap tells you how much you can borrow. But your savings don't disappear — they're available to cover stamp duty, registration fees, LMI stamp duty, and whatever deposit is needed on top of the capped loan. The tool runs the same binary search as Ceiling 1, but instead of checking whether baseLVR exceeds a maximum LVR, it checks whether the loan implied by a given price exceeds the DTI loan cap:

This always gives a higher result than maxNewMortgage ÷ lvrTier — because that naive formula assumes the minimum possible deposit, ignoring any surplus savings the buyer has. The correct answer uses all available savings.

Why gross income. DTI is assessed on gross (pre-tax) income at every Australian lender. Superannuation is excluded. Bonuses and overtime require a 2-year history before most lenders count them; base salary is the conservative input.

What "binding" means. If your Ceiling 2 price is lower than Ceiling 1, income is the constraint — more savings wouldn't help you here. See Section 13 for why 6× is the threshold used.

Ceiling 3 answers: given your income and living costs, what's the highest property price you can reach when serviceability caps your loan?

The stress rate. APRA requires all lenders to assess serviceability at the actual loan rate plus a 3% buffer. The tool uses the RBA average new loan rate for your loan type (owner-occupier or investor P&I), sourced from the benchmark_rates Supabase table. Stress rate = that rate + 3%.

HEM — the living cost floor. Banks are required by APRA to assume minimum living costs equal to the Household Expenditure Measure (HEM) for your household type, regardless of what expenses you declare. The tool looks up HEM from the hem_benchmarks table using three inputs: household type (single or couple), number of dependants, and metro vs regional location. See Section 12 for the HEM source and methodology.

You can enter your actual expenses if they're higher than HEM. The tool won't accept a figure below HEM — that's the bank's floor and it can't be overridden.

Step 1 — find the loan cap.

Step 2 — find the max price using your savings. Exactly the same binary search as Ceiling 2, but substituting the serviceability loan cap (maxLoan) for the DTI loan cap. The highest price where savings cover upfront costs plus the deposit on top of the loan cap is the Ceiling 3 price.

What the outcome screen shows. All three ceiling prices side by side, with the lowest flagged as binding. The serviceability breakdown shows the full path: income → tax → net monthly → minus HEM and existing commitments → max monthly repayment → max loan at stress rate → savings applied on top → max price. Each ceiling also shows how your savings would be split between loan, deposit, stamp duty, and fees at that ceiling price.

What this is not. A formal pre-approval. These ceilings are calculated from published benchmarks and the inputs you provided. Lenders apply additional factors — income shading, credit history, property-specific risk, internal policy buffers — that can reduce the approved amount, sometimes materially. Get formal pre-approval from a broker or bank before inspecting properties seriously, and before making any offer.