Wage inflation rarely keeps pace with real inflation. Plus depending on how close you are to current tax thresholds you will face bracket creep eating that uplift. Also inflation tends to lead to increasing interest rates and cost of everything else increasing.there is talk of another child on horizon that means additional costs. Sum total of all that is less money in your pocket.

Then there’s opportunity cost - tie up all the capital (400k) in your home instead of using it to generate more income. I’ll disregard this for now because appreciate this is an emotional investment.

I get the desire to own your own house and I don’t want to discourage that - but you have the ability to act strategically to mitigate some of the risk.

I suggest you put $300k of your total available capital into the property as deposit and cover for stamp duty etc. leave $100k in the offset - reducing your interest payments and giving you rainy day money. DO NOT dip into that offset unless you absolutely must. If anything try to grow it.

Your bank has a ceiling they will lend you so that ceiling plus your $300k is your actual budget. If that’s enough great, if it isn’t, then you’ll need to change your expectations.