This will depend on your other financial commitments. For some time now a 28/36 rule has been used. It suggests that your fixed housing costs (home loan repayments, insurance, rates) should ideally be no more than 28% of your income before tax. If you add in your other current debt repayments (loans, credit cards, store credit) it should be no more than 36% of your income before tax. To work out each one, divide the payments total by your before-tax income over the same period. An answer of 0.28, for example, would mean 28%. Worrying reports from late 2022 showed that new homeowners were having to spend around 50% of their before-tax income on their home loan. It had risen from a long-term average of around 37%. Although rising interest rates were contributing, the main cause was the higher property prices requiring these ‘unaffordable’ home loans.