How much can I buy a house for in Perth?

How Much Can I Buy a House for in Perth?

One of the first questions many home buyers ask is, “How much can I buy a house for in Perth?” The answer depends on more than just your income. While online borrowing calculators can provide a rough estimate, lenders assess several factors before determining how much they’re prepared to lend.

Your purchasing budget is generally influenced by two key factors: your borrowing power and the amount you can contribute towards the purchase, including your deposit and associated buying costs.

At Lime Mortgage Brokers, we compare home loan options from more than 30 Australian lenders to help you understand your borrowing capacity and maximise your purchasing potential.

What is your borrowing power?

Let’s talk borrowing power – this is an affordability calculation that the bank completes to see if you can afford a mortgage in Perth. It’s a function of your income as assessed by the bank less your commitments again as assessed by the bank. The key here is how the bank assesses the income and commitments. Banks have differing policies concerning how they calculate the income and commitments that they will use for assessment.

For example: lender A may allow you to use 100% of any allowances you receive while lender B may only use 80% of your allowances. If you are working in a job that has many allowances this can make a significant difference in the amount you can borrow between lender A and lender B. These policies impact all the elements that can make up your income and include but are not limited to:

• How overtime is calculated
• How are allowances calculated
• How are shift penalties calculated
• Whether a lender will use all your government benefits
• Will the lender use child maintenance
• How much rental income will they use
• If you are self-employed do they look at the current year, or average or the last two years
• Do they allow investment income, etc

What is the level of contribution that you have to make towards the purchase?

This is much the same when you consider your commitments. Lenders will have differing policies around how they calculate existing commitment values. This may include:

• How they calculate your current commitment on existing loans like mortgages or car/personal loans
• Buy now pay later, do they include these separately or consider this as part of living expenses
• Novated lease commitments
• The rate they use to calculate the commitment on the new loan you are taking out
• Business debts

If you combine the differences from one lender to another you can get a significant difference in the amount a bank will lend you and this may not accurately reflect your income/commitment profile but more the way the bank sees your income/commitment profile.

Your level of contribution also impacts your budget. Lenders will lend you a % of the purchase price and you have to fund the balance and cover the costs of stamp duty and settlement fees.

For example: if you have $50,000 to cover your deposit to the lender. Lender A may lend you a maximum of 90% of the purchase price but lender B may lend you 92% of the purchase price. Therefore in this example lender A you would have a purchase price of $500,000 while with lender B this would be $625,000. As a result with Lender B, if you had the borrowing capacity, you would be able to purchase for a higher value based on the $50,000 you had for deposit to the lender.

Lenders may also have policies around the funds you are using for your contribution, for example, if you are getting a gift or selling an asset to fund your contribution they may or may not allow this as part of your contribution when assessing your loan which can also impact how they assess your level of available contribution.

How Does Your Deposit Affect Your Home Buying Budget?

Your deposit is another important factor that determines how much you can spend on a property. Most lenders will finance a percentage of the property’s purchase price, while you contribute the remaining amount as your deposit.

You’ll also need to budget for additional purchasing costs, which may include stamp duty (where applicable), settlement costs, legal or conveyancing fees, lender fees, and other government charges.

Generally, a larger deposit means you may be able to borrow under more favourable lending conditions. However, different lenders have different maximum Loan-to-Value Ratio (LVR) requirements, which can influence your purchasing budget.

Why Do Lender Policies Matter?

Not every lender views your financial situation the same way.

For example, one lender may allow you to borrow up to 90% of a property’s value, while another may approve a higher Loan-to-Value Ratio if you meet their lending criteria. Similarly, some lenders are more flexible when assessing self-employed applicants, casual employees, or borrowers with multiple income sources.

Lenders also assess the source of your deposit differently. Savings accumulated over time are generally viewed favourably, while gifted funds or money received from selling assets may be treated differently depending on the lender’s policies.

These differences can significantly affect both your borrowing power and your overall property budget.

Can a Mortgage Broker Help Maximise Your Budget?

Because every lender has different policies, comparing home loans isn’t simply about finding the lowest interest rate. It’s about identifying the lender whose lending criteria best suit your financial circumstances.

At Lime Mortgage Brokers, we compare loan options across more than 30 Australian lenders. Rather than relying on a single bank’s assessment, we review multiple lending policies to help identify suitable options that align with your borrowing capacity and homeownership goals.

Whether you’re purchasing your first home, upgrading, investing, or refinancing, having access to a wide panel of lenders may provide more opportunities than approaching a single bank.

Before you begin searching for a property, it’s often worth obtaining home loan pre-approval. Pre-approval gives you a clearer understanding of your borrowing capacity, helps you shop within your budget, and may strengthen your position when making an offer. Read our guide to How to Get Home Loan Pre-Approval.

Why Choose Lime Mortgage Brokers?

Buying a home is one of the biggest financial decisions you’ll make, and choosing the right lender can have a significant impact on both your borrowing capacity and long-term financial outcomes.

At Lime Mortgage Brokers, we take the time to understand your financial situation before comparing home loan options from a wide range of Australian lenders. Our personalised approach helps simplify the lending process while ensuring you receive guidance tailored to your goals. From calculating your borrowing power to managing your application through to settlement, we’re with you every step of the way.