Do you know your borrowing capacity?
As property prices hit record highs across a number of cities, it’s no surprise that new home loan balances are also nudging towards fresh peaks. Today we’ll reveal what the ‘average’ new home loan is in your state, and provide you with some handy tips to help bring down your balance sooner.
High interest rates and a cost of living crunch haven’t stopped home values rising 8% nationally over the last 12 months.
According to CoreLogic that’s added an extra $59,000 to the average Australian home’s value.
It’s great news for home owners, but not so good for buyers, who may have to take out a bigger loan to fund a property purchase.
On the plus side, not everyone is having to upsize their home loan.
In some cities, new mortgage sizes are staying pretty still or becoming slightly smaller.
What’s the average in your state?
Across Australia the ‘average’ new mortgage is at a record high of $626,055 as of May 2024, according to the Australian Bureau of Statistics. That’s up from $584,607 just 12 months earlier in May 2023.
That means you’d need to be able to make mortgage repayments of about $3,875 per month (assuming that you take out a 30-year principal and interest home loan at 6.3%).
However, ABS data shows plenty of variation in new loan sizes in different states and territories.
Here’s what’s happening across the country:
NSW – the average new home loan size is currently $767,584, up from $720,029 in May 2023.
VIC – average new home loan is $601,891, slightly up from $598,949 in May 2023 but well below the peak of $651,364 in January 2022.
QLD – the sunshine state’s average new home loan size is $586,627, a solid increase on the May 2023 average of $521,609.
SA – average new home loan of $541,775, a big jump on the May 2023 average of $467,438.
WA – average new home loan of $538,860, up from $472,080 in May 2023.
TAS – the Tassie market has seen very little movement in new loan sizes. The current average is $462,324, just a few thousand dollars shy of the $465,313 average in May 2023.
ACT – the average new home loan across Canberra is $614,242, up from $589,130 in May 2023.
NT – in the Top End, the average new home loan has increased slightly, currently sitting at $437,427 compared to $424,873 in May 2023.
How to potentially whittle away your home loan sooner
No matter where in Australia you are buying a home, managing a home loan can be stressful at a time when interest rates are high.
So, it’s important to look for ways to help ease the pressure.
Choosing an offset home loan, for example, can let you put spare cash to work by helping to lower your monthly interest charges.
It can also allow you to build up a savings buffer while also reducing the overall interest you pay on the loan, and thus, bring the balance down quicker.
If you are unlikely to have substantial savings, looking for a loan that lets you make small, extra repayments at no additional cost can be a way to pay down the loan sooner, and save on interest costs.
Even something as simple as switching from monthly to fortnightly loan repayments could deliver savings on your interest repayments over the course of the loan.
Paying half the monthly amount every fortnight can mean paying the equivalent of an extra month’s repayments each year, helping you forge ahead with the loan without too big an impact on your household budget.
What matters is that you speak to us about a mortgage that suits your unique needs. One that gives you the benefits of the loan features you need, plus a competitive interest rate.
So if you’ve got your eye on a potential new home – or just want to find out your borrowing capacity so you can start searching – get in touch with us today.
