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What is the average mortgage in Australia?

We’ll take a look at the average Australian home loan for investors and owner-occupiers, hopefully giving you a more complete picture of Australian real estate.
Ava Crawford
Written by
Ava Crawford
Imogen Baxter
Reviewed by
Imogen Baxter
Last updated
May 3, 2023
0 minute read
Apartment block in sydney where mortgages are on the rise

As the rate of Australian homeowners continues to descend, it’s a strange time for those invested in the property market. Whether you are currently a homeowner, looking to buy a house, or simply interested in the movement of house prices, the average loan size is something we can all be curious about.

So what is the average mortgage? At the end of 2022, it was $601,797, based of lending indicators from the Australian Bureau of Statistics (ABS).

However, this figure only tells a part of the story. The average home loan in Sydney is an entirely different thing from the average home loan in the regional Northern Territory. We’ll take a look at the average Australian home loan for investors and owner-occupiers, hopefully giving you a more complete picture of Australian real estate.

The average mortgage around Australia

There are a few factors to remember when looking at average figures for home loan size. These include the location of the property (each state has a very different property market), whether it is an investor or owner-occupier loan, and whether it is for an existing property or a newly built property.

Looking at all new home loans (excluding refinancers), the average loan amounts for each state are:

  • New South Wales (NSW): $752,164
  • Australian Capital Territory (ACT): $636,747
  • Victoria (Vic): $618,109
  • Queensland (QLD): $532,535
  • South Australia (SA): $479,253
  • Western Australia (WA): $478,462
  • Northern Territory (NT): $440,260
  • Tasmania (Tas): $459,016

In January 2022, the national average mortgage size was at an all-time high of $618,729. This was such drastic growth that even these lower amounts are well ahead of pre-pandemic mortgages.

The average mortgage size reflects the amount left owing by long-term homeowners and new home loans by buyers in the current market. This means that growing mortgage sizes will likely reflect higher property prices from the pandemic property boom.

Despite uniformly high Australian mortgages, first-home buyers face the continuing problem of shrinking availability. Corelogic reporting has new property listings down year on year in all areas of Australia except Hobart and the regional NT, with an overall drop in new listings of 17.5%.

When paying off a mortgage, borrowers also have to consider the cost of repayments and how those will fit in with their financial situation.

How much are average mortgage repayments in Australia?

To work out the average mortgage repayment, we have to consider whether the home loans are fixed rate or variable rate. Consistent hikes in the cash rate from the Reserve Bank of Australia (RBA) have brought up the cost of monthly repayments for many homeowners, with a lot of uncertainty around how they will continue onwards.

The RBA controls the cash rate, which trickles onto other products that attract interest (like personal loans and credit cards). This includes mortgage rates, where variable-rate home loans are subject to changes, along with banks increasing or reducing their interest rates. Fixed-rate home loans will temporarily be locked at the rate they were applied for, but once the fixed rate expires, borrowers will be subject to all of the same rate movements.

Some home loan repayments may also include additional fees, like monthly service fees. Looking at the comparison rate rather than the headline rate can give you a more accurate idea of how much you will pay on top of the loan amount.

Calculating an average mortgage repayment is difficult since the average mortgage size varies so much. To do this, we work out the average interest rate on a home loan from the current Corelogic data (5.23% p.a.), and apply this to the average mortgage size for each state listed above (assuming a 30-year loan term and a 10% initial deposit). This works out as follows:

  • NSW
    Average monthly repayments: $4,144
  • ACT
    Average monthly repayments: $3,508
  • Vic
    Average monthly repayments: $3,406
  • QLD
    Average monthly repayments: $2,934
  • SA
    Average monthly repayments: $2,641
  • WA
    Average monthly repayments: $2,636
  • NT
    Average monthly repayments: $2,426
  • Tas
    Average monthly repayments: $2,529

These averages do not consider any extra repayments or the ability to refinance.

If you can refinance to a lower interest rate on your home loan, you may be able to save a considerable amount on your repayments. Different lenders may offer more competitive options, with particular products offering incentives like cashback or offset accounts. If you find yourself in this position, it may be worth shopping around or consulting a mortgage broker.

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FAQs

What is the best home loan option?

No one home loan option will suit every person.

The main notes of importance are that you do your research, read the product disclosure statement (PDS) thoroughly, and consult with a financial advisor or mortgage broker if required.

If you are a first-time home buyer, a single parent, or buying in a regional area, it may be worth looking into government schemes to allow easier access to the property.

Is it better to rent or buy a home in Australia?

The choice between renting and buying comes down to your financial circumstances.

Obviously, in the long run, you will spend a lot more money on weekly rent than you will on the average home loan, as there is no “paying off” rent in the same way you can own your home outright.

Taking out a home loan tends to require a significant deposit on top of regular repayments (though low deposit home loan options do exist), which is something many renters do not have access to or the borrowing power to gain. There are far fewer upfront costs for renting, which can make it a better option for those who move around frequently, but for any long-term comparison, paying off a mortgage may land you in a better financial position.

In terms of straightforward costs of weekly rent as opposed to mortgage repayments, there are some places where it is cheaper to rent than buy. In fact, average monthly costs work out cheaper for renters vs. homeowners in 90.9% of Australian suburbs. Corelogic reports that this is the case in:

  • 100% of the ACT
  • 100% of suburbs in Sydney (95.5% of suburbs in the rest of NSW)
  • 100% of suburbs in Melbourne (98.2% of suburbs in the rest of Victoria)
  • 98.1% of suburbs in Adelaide (65.7% of suburbs in the rest of SA)
  • 97.8% of suburbs in Brisbane (64.2% of suburbs in the rest of QLD)
  • 97.6% of suburbs in Hobart (94.9% of suburbs in the rest of Tasmania)
  • 87.9% of suburbs in Perth (40.6% of suburbs in the rest of WA)
  • 51.6% of suburbs in Darwin

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How can I reduce my mortgage repayments?

The quickest tip to reducing your mortgage repayments is to check whether you are still getting the best rate possible and work out how much it will cost to refinance.

Refinancing can be costly, particularly if you do not have enough equity in your property or if your home loan has high exit fees. Still, it can also score you a significantly lower interest rate, meaning lower fees.

Another way to reduce your repayments in the long run is to make extra repayments where possible (if allowed by your home loan - there may be an extra charge attached), whenever you have some extra money on hand. Though it might feel counterintuitive, making extra payments means your total amount owing will be lower, which equals lower repayments and less interest incurred.

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Disclaimer
This article is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation, or needs. In particular, you should seek independent financial advice and read the relevant product disclosure statement (PDS), or other offer documents before making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).
Prepared by OwnHome Services Pty Ltd ACN 664 492 059. This information does not take your personal objectives, circumstances or needs into account. Always read the disclosure documents for products and services before deciding on a product or service, and consider seeking independent legal, financial, taxation or other advice for your unique circumstances.
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