Borrowing costs have doubled — up $71/day since 2015— but so has the price of loyalty

Key points:

• Home loan repayments have surged 98% in the past decade — from $2,214 in 2015 to $4,383 in 2025, as interest rates rose and loan sizes ballooned.
• Borrowers are now paying $71 more per day on average ($2,169 a month) compared to a decade ago, driven by higher interest rates and much larger average home loan sizes.
• Over the same period, the average home loan size increased by 69%. Jumping from $389,939 in 2015 to $659,922 in 2025.
• For mortgage holders willing to shop around, savings on offer have more than doubled (up 108%), rising from $180/month in 2015 to $373/month in 2025. This is equivalent to over $4,400 a year.
• Monthly switching savings peaked at $476 in 2023, but have since declined to $373 in 2025. – despite an almost identical average variable rate (6.31% in 2023 vs 6.32% in 2025).
• This suggests banks are already tightening margins in anticipation of a falling rate environment, making it more important for borrowers to proactively compare and switch.

In a surprise move, the Reserve Bank of Australia (RBA) held the cash rate steady at 3.85%, defying market expectations. While headlines focus on the shock decision, financial comparison site Mozo has released a new analysis of Australia’s mortgage market — revealing just how dramatically borrowing costs have changed over the past decade, and the high price loyal borrowers continue to pay.

“Australian borrowers are navigating a mortgage market that looks nothing like it did ten years ago,” says Rachel Wastell, Mozo’s personal finance expert.

“So while the RBA held today and caught many off guard, it's crucial to remember that it’s now less about waiting for small cuts from the RBA, and more about acting in the new market we’re in.”

“Home loans have become far more expensive, but the reward for switching has never been greater. This is why it’s crucial for borrowers to stop assuming loyalty is rewarded, and start comparing.”

Cost of borrowing doubles as loan sizes surge

Using a decade of variable home loan rate and home loan size data, Mozo found that the average home loan size has jumped from $389,939 to $659,922 – a 69% increase that has magnified the dramatic impact of rising rates. 

In June 2015, the average variable rate on the Mozo database was 4.71% but 10 years later that increased to 6.32%. With borrowers now responsible for much larger debts, even modest rate hikes are translating into steep jumps in monthly repayments.  

The average monthly repayment on a variable home loan has risen from $2,214 in 2015 to $4,383 today, which is $71 more every day that borrowers are on the hook for. 

“Borrowers aren’t just feeling the impact of thirteen rate hikes in under two years, they’re carrying the weight of a decade of rising home loan sizes and relentless repayment pressure,” says Wastell.

 “Loan sizes are bigger, repayments have nearly doubled, and now people are paying the price – a $71-a-day price in fact — so while some borrowers might be waiting on RBA rate cuts, they need to remember that these incremental changes can’t rewrite history.”

It’s not all bad news as switching savings soar

But it’s not all bad news, as the savings on offer for borrowers willing to switch have more than doubled over the same period. These figures are based on Mozo’s analysis of average home loan sizes, and the difference between the leading and average variable home loan rates in the Mozo database, to reflect how much borrowers could save each month by switching to a more competitive rate. 

Mozo’s analysis shows that in 2015, borrowers stood to save $180 a month by switching to a more competitive rate. Today, that figure has more than doubled to $373, which is equivalent to roughly $4,400 a year. That’s an increase of $193 a month, or 108%, over the past decade. However, that’s not the highest point on record. 

According to the analysis, the savings on offers for switchers actually peaked in June 2023 at $476 a month, when competition between lenders was at its fiercest and rates were still rising. Since then, despite the average variable rate holding relatively steady (6.31% in 2023, 6.80% in 2024, 6.32% in 2025), the monthly savings available from switching have fallen. 

“The data tells us that lenders are already pulling back. Margins are tightening, and we’re only just at the start of the rate cut cycle,” says Wastell.

“After 13 hikes, borrowers were hoping for a bit of relief. But if the banks aren’t moving, you’ll have to move yourself. Switching could be the only way to lower your rate and get your budget back on track.”

State-by-state pressure paints a national picture

As part of the analysis, Mozo also examined loan size and repayment trends across the states, and found that while cost pressures are being felt across the country, some borrowers have been hit much harder than others.

Tasmania and South Australia have more than doubled their average home loan sizes over the past decade, jumping from $231,048 to $487,020 and from $292,232 to $590,887 respectively. According to the data, Tasmania has recorded the fastest growth in loan sizes nationally, rising 111% or $255,972 over ten years. South Australia followed closely, with a 102% increase – up $298,655 over the same period. 

Queensland wasn’t far behind, posting the third largest increase, climbing 86% and overtaking Victoria to become the state with the second-largest average home loan size in the country. Starting at just $344,915 in 2015, the average home loan size in the Sunshine State has now climbed by $296,520 to reach $641,435 in 2025.  In comparison, Victoria’s home loan size has grown 58% over the decade, from $396,939 in 2015 to $627,744 in 2025, a rise of $230,805. 

While New South Wales still holds the highest average home loan size nationally, at $794,831 in 2025, its decade-long growth was more subdued in percentage terms, rising 70% from $467,132 in 2015. That said, the dollar-value increase – $327,699 – is still the largest jump of any state. 

Other regions saw solid growth as well: the ACT rose 59%, from $387,842 to $615,660, while WA jumped 55%, from $383,053 to $594,250 over the decade. The Northern Territory saw much lower growth, at 25% over the decade, rising from $388,724 in 2015 to $487,573 in 2025.

“Borrowers in places like Queensland, South Australia and Tasmania have experienced more than just the impact of rising rates, loan sizes have exploded as borrowers look beyond traditional hot spots just to get a foot on the property ladder,” said Wastell.

“Even if rates fall dramatically that won’t change the fact Australians are now carrying significantly more debt than they were ten years ago. The best way to save on your home loan isn’t to wait for a rate cut, or rely on future cuts, it’s to proactively compare and switch.” 

“Property prices might drop, but average loan sizes rarely shrink in a meaningful way. So if you want to cut costs, switching is still one of the smartest moves you can make.”

To find out more about how the mortgage market has shifted across Australia and within each state, you can download Mozo’s Chart Pack here.

Research notes:

ABS Home loan size data sourced from ABS Lending Indicators. June figures used for 2015-2024, March used for 2025*.

Average and leading home loan rates based on the Mozo.com.au product database, owner occupier variable home loan rates, $500,000 loan amount, LVR 80%, principal and interest, accurate as at 1 June 2015-2025.

Average and leading monthly mortgage repayment figures calculated using rates from the Mozo product database, owner occupier variable home loan rates, $500,000 loan amount, LVR 80%, principal and interest, taken from 1 June 2015 - June 2025.

*ABS data change was due to a shift in reporting from monthly to quarterly.