Home loan costs growing faster than income

Monday 15 February 2010

Article by Mozo

Mortgage sizes are significantly outgrowing property price rises and wage increases.

Exclusive figures from Mortgage Choice show that the trend is particularly significant in western Sydney and Newcastle, the Daily Telegraph reported.

The news may encourage Aussies to compare home loans depending on their location and personal budget. The research revealed that in Sydney, the biggest increases in loan size relative to median real estate values have been in Liverpool, Fairfield and Parramatta. In contrast, the smallest have been in Ryde, Hawkesbury and Neutral Bay.

Mortgage Choice found that in Liverpool, the average loan size has grown by more than 100 per cent since 2002, from $167,000 to $340,000.
John Lindeman, head of research at Residex, told the newspaper: "People have been getting more into debt by buying a house – borrowing more of the value."

Last week, a survey by the investment bank UBS revealed that credit underwriting standards for home loans will tighten further this year.

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