What $1m costs at November 2026 rates
The Reserve Bank has lifted the cash rate five times in 2026, from 3.60% to 4.85%, most recently on 3 November. The big four passed the September rise on in full from 9 October, and Canstar estimated the average owner-occupier variable rate at 6.49% once they caught up; if the November rise is passed on in full, that average becomes about 6.74%. Sharper lenders still advertise from 5.89% and the average across every advertised product is higher at 6.75%. On $1,000,000, each 0.25-point step moves the 30-year repayment by about $165 a month, and the gap between the cheapest and the average rate is worth $389 a month.
Sydney and inner-Melbourne territory. A $1m loan usually means a $1,250,000 purchase with 20% down — well above the average new loan of $731,000. Lenders will look closely at your debt-to-income ratio: $1,000,000 at APRA’s DTI threshold of 6 implies at least $166,667 of gross household income before a loan stops counting as “high DTI”, and banks may only write 20% of new owner-occupier loans above that line.
25 vs 30 years: total interest on $1,000,000
Shortening the term is the most powerful way to cut interest — if the budget allows. At 6.49% a 30-year term costs $432 a month less than 25 years, but total interest climbs from $1,023,747 to $1,273,078 — an extra $249,331. A 20-year term would cost $704 a month more than 25 years and save another $235,784.
| Term | Monthly | Total repaid | Total interest | Interest vs loan |
|---|---|---|---|---|
| 20 years | $7,450 | $1,787,963 | $787,963 | 79% |
| 25 years | $6,746 | $2,023,747 | $1,023,747 | 102% |
| 30 years | $6,314 | $2,273,078 | $1,273,078 | 127% |
Principal & interest vs interest-only on $1m
Interest-only (IO) periods of up to five years are mainly used by investors and by owner-occupiers managing a temporary squeeze, such as parental leave. At 6.49% the IO repayment on $1,000,000 is $5,408 a month, $906 less than principal and interest. The catch: after five years you still owe all $1,000,000, and the loan has only 25 years left to clear it, so the repayment jumps to $6,746 — $1,337 a month more than during the IO period, and $432 more than if you had paid P&I from day one. Over the life of the loan you pay about $75,169 extra interest, before any IO rate premium (RBA data show investor interest-only loans priced roughly 0.2 points above P&I in August 2026).
Monthly vs fortnightly vs weekly repayments on $1,000,000
Most Australian lenders let you choose how often you pay. If you choose a true fortnightly repayment the lender works out $2,913 — the 30-year loan simply split into 26 smaller payments a year — and it saves only a little interest. The trick is paying half the monthly amount, $3,157, every fortnight: 26 halves equal 13 monthly payments a year, so the loan is gone in about 24 years 2 months instead of 30 years and you save about $292,775 of interest. Paying a quarter of the monthly amount ($1,579) weekly works almost the same: about 24 years 1 month and $294,010 saved.
| Frequency | 25 yrs | 30 yrs | Per year (30 yrs) | Total interest (30 yrs) |
|---|---|---|---|---|
| Monthly | $6,746 | $6,314 | $75,769 | $1,273,078 |
| Fortnightly | $3,112 | $2,913 | $75,734 | $1,272,006 |
| Weekly | $1,555 | $1,456 | $75,718 | $1,271,547 |
“Fortnightly” and “weekly” here are the lender-calculated amounts; see the fortnightly vs monthly guide for the half-monthly method.
How an offset account changes a $1m loan
An offset account is a transaction account linked to the loan: the balance is subtracted before interest is charged, so $50,000 of savings against $1,000,000 means you pay interest on $950,000 — while the repayment stays at $6,314, and the extra goes straight off the principal. Because the saving equals your loan rate and is not taxed, it is worth more than a savings account paying 6.49% before tax to anyone who pays income tax.
| Offset balance | Interest saved | Time saved | First-year saving |
|---|---|---|---|
| $20,000 | $112,058 | 1 year 5 months | $1,298 |
| $50,000 | $255,820 | 3 years 4 months | $3,245 |
| $100,000 | $448,072 | 5 years 10 months | $6,490 |
Balance held constant for the whole loan; in practice it rises and falls with your pay cycle. Offset loans often carry a package fee or a slightly higher rate — see offset accounts explained.
What income do you need for a $1,000,000 mortgage?
Australian lenders do not use a fixed income multiple. They test whether you could still pay at the assessment rate — the loan rate plus APRA’s 3-point serviceability buffer, 9.49% here — after your declared living expenses (or the Household Expenditure Measure, if higher), other debts and credit-card limits. At 9.49% the 30-year repayment on $1,000,000 would be $8,401 a month, $2,087 more than you would actually pay today.
- 30% rule of thumb: keeping the real repayment ($6,314) under 30% of gross pay needs about $252,600 a year — a single earner on that salary takes home about $13,999 a month in 2026-27, so the repayment is 45% of take-home. A couple on $126,300 each takes home $15,892 together (40%).
- APRA debt-to-income limit: since 1 February 2026 banks may write only 20% of new owner-occupier loans at a DTI of 6 or more. $1,000,000 ÷ 6 = $166,700 of gross income before this loan alone becomes “high DTI”.
Payslip detail: $130,000 salary after tax. For the full picture see how much can I borrow.
Deposit, LMI and the 5% Deposit Scheme
With a 20% deposit — $250,000 on a $1,250,000 home — no lenders mortgage insurance applies. Borrow more than 80% of the value and the lender passes on an LMI premium, which is usually added to the loan. The table uses one lender’s indicative premium table (full-doc, May 2026); your quote will differ, and most states also charge stamp duty on the premium.
| LVR | Deposit | Property price | Deposit $ | LMI rate | LMI premium | Extra / month if added |
|---|---|---|---|---|---|---|
| 85% LVR | 15% | $1,176,471 | $176,471 | 1.41% | $14,070 | $89 |
| 90% LVR | 10% | $1,111,111 | $111,111 | 2.52% | $25,160 | $159 |
| 95% LVR | 5% | $1,052,632 | $52,632 | 4.60% | $46,030 | $291 |
5% Deposit Scheme: with a 5% deposit, $1,000,000 buys about $1,052,632. That is under the First Home Guarantee cap in NSW (Sydney + Newcastle, Lake Macquarie, Illawarra, Central Coast, Coffs Harbour–Grafton, Mid North Coast, Richmond–Tweed) — so an eligible first home buyer could skip LMI entirely and save about $46,030. See LMI explained and the First Home Guarantee 2026 rules.
Fun equivalent: $1m in flat whites
Neighbouring loan amounts
| Loan | 30 yrs / month | 30 yrs / fortnight | 25 yrs / month | Interest (30 yrs) |
|---|---|---|---|---|
| $850,000 | $5,367 | $2,476 | $5,734 | $1,082,116 |
| $900,000 | $5,683 | $2,622 | $6,071 | $1,145,770 |
| $950,000 | $5,998 | $2,767 | $6,409 | $1,209,424 |
| $1,000,000 | $6,314 | $2,913 | $6,746 | $1,273,078 |
| $1,100,000 | $6,946 | $3,204 | $7,420 | $1,400,386 |
| $1,200,000 | $7,577 | $3,495 | $8,095 | $1,527,693 |
| $1,300,000 | $8,208 | $3,787 | $8,770 | $1,655,001 |
All at the 6.49% average variable rate.