What is the average mortgage size in Australia?

What is the average mortgage size in Australia?

Nell Matzen - 21 Jul, 2021

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According to the Australian Bureau of Statistics’ (ABS) May 2021 Lending Indicators, the average mortgage size in Australia is $549,493. However, a mortgage size is very much dictated by a properties’ location as this number varies widely from state to state and even suburb to suburb.

How much can I borrow?


Average mortgage size in Australia by state

When it comes to mortgage sizes, all Australian states are not on an even playing field. Victoria and New South Wales boast the largest mortgage sizes, thanks to Sydney and Melbourne, Australia’s largest cities. Sydney brings the state average up due to its skyrocketing house prices, and Melbourne isn’t too far behind. Australia’s less populated states are more affordable, but prices have also crept up during the 2020-21 boom.

couple looking over their mortgage

Take a look at the average new lending amounts across Australia:

Average new lending amounts by states (Updated July 2021)

  • NSW $684,086
  • VIC $560,096
  • SA $406,086
  • NT $406,598
  • TAS $380,932
  • ACT $548,866
  • WA $430,248
  • QLD $457,006

Getting a pre-approval can potentially shave time and stress off your house hunt. Speak to one of our home loan consultants to get to the next steps to getting your pre-approval with a lender.

Here’s how you get started online:

Step 1. Select your state below and whether you want to purchase or refinance.

Step 2. After answering a few questions, you’ll be given possible home loan options to start comparing straight away and work out your estimated borrowing capacity and break down your repayment and upfront costs. 

Select your state and enquire now.

How much is the average monthly mortgage repayment?

According to Canstar’s calculations (based on the average new home loan amount and May’s variable interest rate), Australia’s average monthly mortgage repayment for an existing home is $2,489. In correlation with mortgage sizes, this amount varies depending on which state and suburb a property is located. Canstar’s calculations were based on principal and interest payments, paid monthly over 30 years. The estimations did not take any charges or fees into account and were based on the variable rate of 3.22% staying the same throughout the loan period.

What's my borrowing power if I earn $ per year?

Median monthly mortgage repayment on an existing home by state:

  • NSW $3,220
  • VIC $2,607
  • SA $1,792
  • NT $1,741
  • TAS $1,693
  • ACT $2,359
  • WA $1,917
  • QLD $2,012
  • National $2,489

Median monthly mortgage repayment on new construction:

  • NSW $2,362
  • VIC $2,009
  • SA $1,624
  • NT $2,057
  • TAS $1,719
  • ACT $2,601
  • WA $1,729
  • QLD $1,915
  • National $1,964

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How can I estimate the cost of my mortgage repayments?

How much a mortgage will cost you each month is a complicated equation that takes into account fees, payment terms, loan amount and, of course, interest rates. Luckily, eChoice’s loan repayment calculator takes all the guesswork out of calculating your mortgage repayments, allowing you to play around with different loan amounts to see what your budget can afford.

Example: What is the mortgage repayment on a $500,000 loan?

According to the eChoice loan repayment calculator, a $500,000 mortgage taken out at an interest rate of 3.92% over a 30-year term would equate to an estimated repayment of $2,365 per month, with a total loan repayment of $851,067.

What is my mortgage repayment?

$1,514
/month

SHOW DISCLAIMER

How much money should mortgage repayments be as a percentage of income?

The amount of income directed towards your mortgage depends on your loan size, budget, interest rates, income, and more. However, the general rule is 28% of your income should be funnelled into your mortgage. Anything above that amount, the average earner might find their financial situation a little uncomfortable.

However, this is just a general rule, and your finances may allow for a bigger or smaller percentage. So, budget wisely and seek professional financial advice before deciding how much to borrow and how much you can spend on repayments.

What happens if my monthly mortgage repayments are greater than 28% of my income?

As a general rule, if your mortgage repayments are more than 28% of your monthly income, you may be at risk of falling prey to mortgage stress. After this percentage, the average household will find it challenging to keep on top of their repayments, in addition to other household expenses. Additionally, people in mortgage stress are likely to struggle if interest rates rise—all in all, a stressful situation. Even if a household can cover this level of mortgage repayment, they could still feel the pinch with an interest rate rise.

With interest currently at historic lows, experts predict that they are likely to rise in the coming months or years. Mortgage holders are warned not to get complacent and take steps to create a financial buffer to cover larger mortgage repayments, whether through refinancing or budgeting.

How many years do you have to pay off a house?

There is no concrete amount of time in which you have to pay off your mortgage. The typical loan term is between 10 and 30 years, with the majority of mortgage holders opting for the 30-year time frame. You may be able to pay off your loan faster if your loan allows extra repayments; however, be prepared for potential exit and early termination fees.

woman looking over her mortgage

What is the average interest rate for home loans?

How long is a piece of string? Interest rates are determined by a number of factors and vary according to the type of mortgage, the loan terms, and even the day. The numbers are continuously changing depending on the Reserve Bank of Australia’s (RBA) cash rate and the economy.

Australia’s 2021 interest rates are at an all-time low. As of June, the average fixed 3-year rate was 2.93%, with variable rates at 3.93%. Low rates are enticing investors and new homeowners the like, but many experts are predicting an inevitable rate rise.

What determines a mortgage interest rate?

Interest rates are determined by a multitude of factors but are affected mainly by the RBA official cash rate – which as of July 2021, is sitting at a historically low 0.1%. The cash rate is the rate charged by the RBA to lend money to banks; then, the banks pass this interest rate on to their customers (plus a profit margin). As demonstrated by lowering interest rates in response to the COVID19 pandemic, the RBA’s cash rate is adjusted to complement and strengthen the current economy.

Personal factors will also influence your interest rate, including; whether you choose a fixed or variable rate, your loan term, loan amount and your credit rating.

What mortgage amount could I qualify for?

A lender will weigh up multiple factors when deciding your approval amount. For example, they will consider your income, partner’s income, dependents, living expenses, and more. Applying for pre-approval can be a good way to determine how much you are eligible for whilst making you a more attractive buyer.

How much is the average loan amount for first home buyers?

According to Finder.com.au, the average loan amount for first home buyers was $451,002 as of May 2021, an average increase of roughly 16% since 2019. This number is a good indication of what first home buyers around the country can afford, but everyone’s loan size should be a personal choice based on their financial situation. Ultimately, when it comes to your mortgage, you don’t want to bite off more than you can chew, which could leave you with financial difficulties and stress for years to come.

Do as much research as possible to figure out what size mortgage you would be comfortable servicing. Use online tools, like eChoice’s loan repayment calculator, make a strict but reasonable budget (or learn how to create one in the first place) and employ the help of a financial advisor.

Words by Nell Matzen

Sources:

Looking for a home loan? Contact eChoice. With access to 100’s of mortgage products from over 25 different lenders, eChoice brokers have the tools to help you find the perfect home loan to suit your needs. Best of all? We do all the paperwork!

Unlock your suburb's demographic profile

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Looking to buy in Ultimo, NSW 2007.

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Average property price
$1,000,000
Average loan amount
$800,000
Average annual salary
$60,000
Average credit card limit
$2,400
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This information is a guide only and is an estimate only based on the past 12 months of aggregated online mortgage enquiries from eChoice and partner programs.

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