What $400k 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 $400,000, each 0.25-point step moves the 30-year repayment by about $66 a month, and the gap between the cheapest and the average rate is worth $156 a month.
Who borrows $400k? A loan this size is common for apartments and townhouses in the capitals, for houses in regional Queensland, South Australia, Western Australia and Tasmania, and for buyers who are refinancing an older loan or have a large deposit from a previous sale. Because the balance is well under the $731,000 average new owner-occupier loan (ABS, June quarter 2026), fees matter more than usual: a $395 annual package fee is about 0.10% of the loan each year, so on a small balance a no-fee basic variable loan can beat a slightly cheaper package rate.
25 vs 30 years: total interest on $400,000
Shortening the term is the most powerful way to cut interest — if the budget allows. At 6.49% a 30-year term costs $173 a month less than 25 years, but total interest climbs from $409,499 to $509,231 — an extra $99,732. A 20-year term would cost $282 a month more than 25 years and save another $94,314.
| Term | Monthly | Total repaid | Total interest | Interest vs loan |
|---|---|---|---|---|
| 20 years | $2,980 | $715,185 | $315,185 | 79% |
| 25 years | $2,698 | $809,499 | $409,499 | 102% |
| 30 years | $2,526 | $909,231 | $509,231 | 127% |
Principal & interest vs interest-only on $400k
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 $400,000 is $2,163 a month, $362 less than principal and interest. The catch: after five years you still owe all $400,000, and the loan has only 25 years left to clear it, so the repayment jumps to $2,698 — $535 a month more than during the IO period, and $173 more than if you had paid P&I from day one. Over the life of the loan you pay about $30,068 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 $400,000
Most Australian lenders let you choose how often you pay. If you choose a true fortnightly repayment the lender works out $1,165 — 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, $1,263, 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 $117,110 of interest. Paying a quarter of the monthly amount ($631) weekly works almost the same: about 24 years 1 month and $117,604 saved.
| Frequency | 25 yrs | 30 yrs | Per year (30 yrs) | Total interest (30 yrs) |
|---|---|---|---|---|
| Monthly | $2,698 | $2,526 | $30,308 | $509,231 |
| Fortnightly | $1,245 | $1,165 | $30,293 | $508,803 |
| Weekly | $622 | $582 | $30,287 | $508,619 |
“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 $400k 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 $400,000 means you pay interest on $350,000 — while the repayment stays at $2,526, 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 | $102,328 | 3 years 4 months | $1,298 |
| $50,000 | $211,068 | 6 years 11 months | $3,245 |
| $100,000 | $327,692 | 10 years 9 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 $400,000 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 $400,000 would be $3,360 a month, $835 more than you would actually pay today.
- 30% rule of thumb: keeping the real repayment ($2,526) under 30% of gross pay needs about $101,000 a year — a single earner on that salary takes home about $6,515 a month in 2026-27, so the repayment is 39% of take-home. A couple on $50,500 each takes home $7,345 together (34%).
- 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. $400,000 ÷ 6 = $66,700 of gross income before this loan alone becomes “high DTI”.
Payslip detail: $105,000 salary after tax · $55,000 salary after tax. For the full picture see how much can I borrow.
Deposit, LMI and the 5% Deposit Scheme
With a 20% deposit — $100,000 on a $500,000 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% | $470,588 | $70,588 | 0.97% | $3,876 | $24 |
| 90% LVR | 10% | $444,444 | $44,444 | 1.87% | $7,492 | $47 |
| 95% LVR | 5% | $421,053 | $21,053 | 3.35% | $13,380 | $84 |
5% Deposit Scheme: with a 5% deposit, $400,000 buys about $421,053. 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); regional NSW; VIC (Melbourne + Geelong); regional VIC; QLD (Brisbane + Gold Coast, Sunshine Coast); regional QLD and more — so an eligible first home buyer could skip LMI entirely and save about $13,380. See LMI explained and the First Home Guarantee 2026 rules.
Fun equivalent: $400k in flat whites
Neighbouring loan amounts
| Loan | 30 yrs / month | 30 yrs / fortnight | 25 yrs / month | Interest (30 yrs) |
|---|---|---|---|---|
| $300,000 | $1,894 | $874 | $2,024 | $381,923 |
| $350,000 | $2,210 | $1,019 | $2,361 | $445,577 |
| $400,000 | $2,526 | $1,165 | $2,698 | $509,231 |
| $450,000 | $2,841 | $1,311 | $3,036 | $572,885 |
| $500,000 | $3,157 | $1,456 | $3,373 | $636,539 |
| $550,000 | $3,473 | $1,602 | $3,710 | $700,193 |
All at the 6.49% average variable rate.