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:
Average monthly repayments: $4,144
Average monthly repayments: $3,508
Average monthly repayments: $3,406
Average monthly repayments: $2,934
Average monthly repayments: $2,641
Average monthly repayments: $2,636
Average monthly repayments: $2,426
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.