What $500k 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 $500,000, each 0.25-point step moves the 30-year repayment by about $83 a month, and the gap between the cheapest and the average rate is worth $195 a month.
A typical first-home-buyer loan. $500,000 sits below the $731,000 average new owner-occupier loan reported by the ABS for the June quarter 2026. With a 20% deposit it buys a $625,000 home; with the 5% Deposit Scheme it buys $526,316 with no LMI if the price is under your area’s cap — which is true even in regional Victoria and most regional areas.
25 vs 30 years: total interest on $500,000
The term is a trade-off between monthly comfort and lifetime cost. At 6.49% a 30-year term costs $216 a month less than 25 years, but total interest climbs from $511,874 to $636,539 — an extra $124,665. A 20-year term would cost $352 a month more than 25 years and save another $117,892.
| Term | Monthly | Total repaid | Total interest | Interest vs loan |
|---|---|---|---|---|
| 20 years | $3,725 | $893,981 | $393,981 | 79% |
| 25 years | $3,373 | $1,011,874 | $511,874 | 102% |
| 30 years | $3,157 | $1,136,539 | $636,539 | 127% |
Principal & interest vs interest-only on $500k
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 $500,000 is $2,704 a month, $453 less than principal and interest. The catch: after five years you still owe all $500,000, and the loan has only 25 years left to clear it, so the repayment jumps to $3,373 — $669 a month more than during the IO period, and $216 more than if you had paid P&I from day one. Over the life of the loan you pay about $37,585 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 $500,000
Fortnightly pay cycles make fortnightly repayments popular in Australia. If you choose a true fortnightly repayment the lender works out $1,456 — 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, $1,579, 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 $146,388 of interest. Paying a quarter of the monthly amount ($789) weekly works almost the same: about 24 years 1 month and $147,005 saved.
| Frequency | 25 yrs | 30 yrs | Per year (30 yrs) | Total interest (30 yrs) |
|---|---|---|---|---|
| Monthly | $3,373 | $3,157 | $37,885 | $636,539 |
| Fortnightly | $1,556 | $1,456 | $37,867 | $636,003 |
| Weekly | $778 | $728 | $37,859 | $635,774 |
“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 $500k 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 $500,000 means you pay interest on $450,000 — while the repayment stays at $3,157, 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 | $105,358 | 2 years 9 months | $1,298 |
| $50,000 | $224,036 | 5 years 10 months | $3,245 |
| $100,000 | $359,948 | 9 years 6 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 $500,000 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 $500,000 would be $4,201 a month, $1,044 more than you would actually pay today.
- 30% rule of thumb: keeping the real repayment ($3,157) under 30% of gross pay needs about $126,300 a year — a single earner on that salary takes home about $7,946 a month in 2026-27, so the repayment is 40% of take-home. A couple on $63,100 each takes home $8,745 together (36%).
- 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. $500,000 ÷ 6 = $83,300 of gross income before this loan alone becomes “high DTI”.
Payslip detail: $130,000 salary after tax · $65,000 salary after tax. For the full picture see how much can I borrow.
Deposit, LMI and the 5% Deposit Scheme
With a 20% deposit — $125,000 on a $625,000 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% | $588,235 | $88,235 | 0.97% | $4,845 | $31 |
| 90% LVR | 10% | $555,556 | $55,556 | 1.87% | $9,365 | $59 |
| 95% LVR | 5% | $526,316 | $26,316 | 3.35% | $16,725 | $106 |
5% Deposit Scheme: with a 5% deposit, $500,000 buys about $526,316. 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 $16,725. See LMI explained and the First Home Guarantee 2026 rules.
Fun equivalent: $500k in flat whites
Neighbouring loan amounts
| Loan | 30 yrs / month | 30 yrs / fortnight | 25 yrs / month | Interest (30 yrs) |
|---|---|---|---|---|
| $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 |
| $600,000 | $3,788 | $1,748 | $4,047 | $763,847 |
| $650,000 | $4,104 | $1,893 | $4,385 | $827,501 |
All at the 6.49% average variable rate.