Borrowing big: Australia’s average mortgage size is now just shy of $600,000

rooftops-and-cityscape-melbourne

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 national loan size has increased by 18% over the past year alone.

The ABS’ latest lending indicators show that Australia’s average mortgage size (for owner-occupier dwellings) reached a record high of $595,568 in November after jumping $24,672 over the course of a month.

While the month-on-month increase was more significant than most, it exemplifies the speed with which borrowing amounts have risen. In November 2020 for instance, the national average was over $90,000 lower at $503,164.

As you’d expect, average mortgage sizes have also risen in all states and territories over the past year, though Victoria’s increase of 24% was by far the highest.

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

November 2020November 2021Annual increase
NSW$644,347$769,45919%
VIC$498,570$618,60224%
QLD$440,045$513,64917%
SA$383,785$421,80110%
WA$416,710$439,5785%
TAS$372,740$445,91520%
NT$380,062$433,33314%
ACT$527,425$585,85911%

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

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

And there were even greater increases to the median value of homes over that 12-month period in capital cities like Hobart (27.7%), Sydney (25.8%) and Brisbane (25.1%), as well as in regional areas of the country (25.2%).

Breaking down the cost of an ‘average’ loan

For most Australians, $600,000 is going to be a significant amount of money, but how would a mortgage of that size play out in terms of regular repayments and total interest costs?

To start with, here’s an example of the monthly principal and interest repayments 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 repaymentDifference
2.00%$2,543
2.50%$2,692+$149
3.00%$2,845+$302
3.50%$3,004+$461
4.00%$3,167+$624

So even with a very low rate of 2.00% (which is unlikely to stay that low over 25 years), a mortgage holder with a $600,000 loan would still need to fork out $2,543/month in repayments. And that’s not taking into account other potential costs like loan fees.

How about the total interest payable on a loan of that size though? Again, that will differ greatly depending on the interest rate, but here’s an example based on a borrower making principal and interest repayments over a loan term of 25 years.

Total interest on a $600,000 loan

Total interestDifference
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 the regular repayments and total interest are on a different loan size, take our handy home loan repayments calculator for a spin.

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

Looking to find a mortgage with a low interest rate? Get to grips a range of rates on offer from a number of different Australian lenders with Mozo’s dedicated home loan comparison tables.

Compare home loans - last updated 14 May 2022

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
  • Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.85% p.a.variable for 24 months and then 2.25% p.a. variable
    2.21% p.a.

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    Details
  • Neat Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a. variable
    1.90% p.a.

    Competitive variable rate. Borrowers choose their repayment schedule (weekly, fortnightly or monthly) Make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

    Details
  • Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.14% p.a. variable
    2.14% p.a.

    Rates have moved in line with RBA. Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required.

    Details
  • Basic Home Loan

    Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.39% p.a. variable
    2.39% p.a.

    Competitive low variable rate. No application or account management fees. Flexibility to split your loan and set different repayment types. Fee free withdrawals of your savings.

    Details
  • Mozo Expert Choice Badge
    Variable Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a. variable
    1.99% p.a.

    Purchase and Refinance. No upfront or ongoing fees. Fast digital application. 100% offset sub account with no account or redraw fees. Comes with a Visa debit card, mobile App, and digital wallet. 20% deposit or equity required. Mozo Experts Choice winner for Best New Home Loan and Low Cost Home Loan 2022. 18 years and over.

    Details
  • Mozo Expert Choice Badge
    Variable Rate Home Loan

    Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a. variable
    1.79% p.a.

    Owner-occupier refinancers only living in NSW and VIC. Receive up to an additional 0.15% off your rate as you pay off the loan. Receive bonus payments up to $2,500. (T&Cs apply)

    Details

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, 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 is for a secured loan with monthly principal and interest repayments for $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 your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.