What is household expenditure measure?
HEM is a benchmark of typical household living expenses by household size and income, and lenders use it as the floor when you declare expenses lower than the benchmark for your household type.
The Household Expenditure Measure (HEM) is a statistical benchmark of typical living expenses published by the Melbourne Institute, segmented by household structure (single, couple, with/without dependants), location (city vs regional) and income band. Lenders use it as a minimum: if your declared expenses are lower than HEM for your household type, they substitute the HEM figure.
HEM tends to land around $2,000-$2,800/month for a single adult and $3,500-$5,500/month for a couple with two dependants, depending on income band. Higher-income households face higher HEM floors because the data shows higher-income households spend more.
Borrowers with disciplined budgets can sometimes get the bank to accept declared expenses below HEM by providing 3-6 months of statements showing the lower spending pattern. Most lenders are reluctant to go far below HEM and any concession is conditional.
Also called
HEM · household expenditure measure · living expense benchmark
Related
- Serviceability: Serviceability is the lender's assessment of whether you can comfortably repay the loan on a stressed rate (current rate…
- Debt-to-income ratio (DTI): DTI is total debt (including the new home loan) divided by gross annual household income; APRA's benchmark for elevated …
General information only, not personal financial advice. Verified against https://ratesniffers.com.au/glossary on 2026-06-01.