Hello PC, I initially wrote this post as a question but thought I'd turn it into a rant. We're currently looking to buy our first PPOR and finding it hard to set a firm budget on how much to spend. We've created spreadsheet models for affordability with various scenarios including increased interest rates and reducing one income to a quarter or a half. We landed on a figure that we could afford and what seemed reasonable to spend. The thing is, despite all this planning around affordability, the final number we've landed on is fairly random. We worked out what we could afford and then worked out what sounded reasonable to us. For example - these are purely hypothetical numbers - $770k seems palatable but then when we think of $800k it just seems like an absurd amount to spend. This is for a PPOR that we are hoping to live in for many years, in our ideal area and add to over time. Certainly, where we are looking, 30-50k seems to be the difference of "can buy a house" vs "can hopefully buy a townhouse or house on a main road". Not sure if a lot of home buyers have a similar threshold to us so could be a supply and demand thing? I am unsure. Anyway, I never had this problem when buying an IP as while I had affordability models it really came down to finding the right property then ensuring numbers added up and it was very easy to be confident making offers and knowing how much I could spend on a particular property. How do we figure out how much to spend without over extending given this is an emotional decision? Summary: Psychological factors of working out how much to spend on our first PPOR are weighing on us.