What is HEM in mortgage applications?

HEM stands for Household Expenditure Measure, published quarterly by the Melbourne Institute. It is the minimum living cost benchmark that APRA-regulated lenders must apply when assessing serviceability — even if a borrower declares lower expenses. HEM covers basic living costs: food, utilities, transport, clothing, and everyday spending. It excludes rent, school fees, and private health insurance, which are added separately.

What is the HEM benchmark in Australia?

HEM varies by household type, number of dependants, and location. Indicative metro figures (March 2026): single with no dependants $2,480/month, couple with no dependants $3,680/month, couple with 2 dependants $4,680/month. Regional figures are approximately 10–15% lower. Lenders are not required to publish their exact HEM figures — the Melbourne Institute licenses them.

Can I use lower expenses than HEM in my mortgage application?

No. Lenders are required by APRA to use whichever is higher: HEM or your declared expenses. If your declared expenses are lower than HEM, the lender uses HEM anyway. This is a regulatory requirement introduced to prevent borrowers understating living costs to qualify for larger loans. If your actual expenses are higher than HEM, your stated expenses are used.

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GetReal — Methodology

Living expenses — HEM

v1.0 — March 2026 (HEM figures current)

HEM (Household Expenditure Measure) is a minimum living cost benchmark published by the Melbourne Institute. APRA requires all lenders to apply at least HEM when assessing serviceability — even if the borrower declares lower expenses. GetReal uses HEM as the floor.

HEM exists because borrowers historically understated living costs on mortgage applications. APRA requires lenders to apply a regulatory minimum regardless of what's declared. The higher of HEM or declared expenses is used in GetReal's serviceability calculation.

HEM covers basic living costs: food, utilities, transport, clothing, and everyday spending. It does not include rent, school fees, or private health — these are added separately.

Household type	Dependants	Metro / month	Regional / month
Single	0	$2,480	$2,150
Single	1	$3,050	$2,700
Single	2	$3,480	$3,100
Single	3+	$3,950	$3,520
Couple	0	$3,680	$3,200
Couple	1	$4,200	$3,700
Couple	2	$4,680	$4,150
Couple	3+	$5,200	$4,650

Indicative figures based on JMD Mortgages HEM estimates (March 2026). Actual lender HEM benchmarks vary and are not publicly published.

Metro vs regional

GetReal determines location type from the buyer's postcode, using ABS ASGS Edition 3 classifications. Metropolitan = all eight GCCSA capital cities (Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Darwin, Hobart). Regional = everything else.

HEM figures are not publicly published by the Melbourne Institute — lenders license them. GetReal uses indicative estimates from JMD Mortgages (March 2026). If a lender applies a stricter HEM, your actual serviceability ceiling will be lower than GetReal's estimate.

↗ Source: Melbourne Institute — Household Expenditure Measure