First-Time Home Buyer's Guide to Bond Affordability

What banks actually measure

Affordability is gross income minus existing debt obligations minus living expenses, with a stressed bond rate. Credit score, employment stability and deposit size shift the outcome.

Bond instalment above roughly 30% of gross household income — before rates and levies — is where approvals tighten. Including ownership costs, many advisers use 35–40% as a ceiling.

Pre-approval vs what you should borrow

The amount a bank offers is the maximum, not the target. Model lifestyle after the bond: can you still save for retirement, maintain an emergency fund and absorb a rate hike?

Fixing a portion of the bond when rates are elevated can cap downside — compare fixed margin to your view on rates over the next five years.

Prepare six months before you apply

Clear small revolving debt, do not open new accounts, gather three months' payslips and bank statements, and reconcile deposits on your statements with payslip dates.

Use MyGenie to see bond instalment, stressed instalment and ten-year equity side by side before you visit a bond originator.

This article is illustrative and educational. It is not financial, tax, or legal advice. Figures are examples only — model your own situation in MyGenie or speak to a licensed financial adviser.