Australia’s average mortgage size is now just under $600,000

Australian homebuyers are borrowing more and more to enter the housing market, with new figures from the Australian Bureau of Statistics (ABS) revealing that the average domestic loan size has increased by 18% in the past year alone.

The ABS’s latest lending indicators show Australia’s average mortgage size (for owner-occupied housing) hit a record high of $595,568 in November after jumping $24,672 in a month.

While the month-over-month increase was larger than most, it illustrates the speed at which borrowing amounts have increased. In November 2020, for example, the national average was more than $90,000 lower at $503,164.

Unsurprisingly, the average mortgage size has also increased in all states and territories over the past year, although the 24% increase in Victoria was by far the largest.

Average loan size by state and territory — November 2020-21 (Source: ABS)

November 2020 November 2021 Annual increase
New South Wales $644,347 $769,459 19%
CIV $498,570 $618,602 24%
QLD $440,045 $513,649 17%
HER $383,785 $421,801 ten%
Washington $416,710 $439,578 5%
TAS $372,740 $445,915 20%
NT $380,062 $433,333 14%
ACT $527,425 $585,859 11%

So what caused this borrowing boom? As contributors, it’s hard to look past the impact of soaring house prices that we’ve witnessed across the country.

According to figures from CoreLogic, the national median home value rose 22.2% to $698,170 in the 12 months to November 2021, an increase of about $125,000.

And there were even bigger increases in median home values ​​over that 12-month period in capitals like Hobart (27.7%), Sydney (25.8%) and Brisbane (25.1%). ), as well as in the regions of the country (25.2%).

Breaking down the cost of an “average” loan

For most Australians, $600,000 will be a significant sum of money, but how would a mortgage of this size play out in terms of regular repayments and total interest charges?

To start, here’s an example of the monthly principal and interest payments a borrower would be required to make on a $600,000 home loan over a 25-year period, based on a few different interest rates:

Monthly repayments on a $600,000 loan

Monthly repayment Difference
2.00% $2,543
2.50% $2,692 +$149
3.00% $2,845 +$302
3.50% $3,004 +$461
4.00% $3,167 +$624

Thus, even with a very low rate of 2.00% (which should not remain so low over 25 years), a mortgage holder with a loan of $600,000 would still have to shell out $2,543/month in repayments. And that doesn’t factor in other potential costs like loan fees.

What about the total interest payable on a loan of this size? Again, this will vary greatly depending on the interest rate, but here is an example based on a borrower paying principal and interest over a 25-year loan term.

Total interest on a loan of $600,000

Total interest Difference
2.00% $162,938
2.50% $207,510 +$44,572
3.00% $253,580 +$90,642
3.50% $301,122 +$138,184
4.00% $350,106 +$187,168

Of course, these scenarios are based on the average loan size. To find out exactly how much regular repayments and total interest are on a different loan size, try our handy home loan repayment calculator.

RELATED: How much could you pocket by refinancing your mortgage in 2022?

Looking for a low interest mortgage? Discover a range of rates offered by a number of different Australian lenders with Mozo’s dedicated home loan comparison charts.

* ATTENTION: This comparison rate only applies to the example or examples given. Different amounts and durations will result in different comparison rates. Costs such as withdrawal charges or prepayment charges, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed corresponds to a guaranteed loan with monthly principal and interest repayments of $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on the amount of your loan, the term of the loan and your credit history. Actual repayments will depend on your personal circumstances and changes in interest rates.

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