As property prices soar to record highs in many cities, it’s no surprise that new home loan balances are also climbing. Today, we’ll explore the ‘average’ new home loan in your state and provide handy tips to help reduce your balance sooner.
High interest rates and a cost of living crunch haven’t deterred home values from rising 8% nationally over the last 12 months. According to CoreLogic, this has added an extra $59,000 to the average Australian home's value.
While this is positive news for homeowners, it poses challenges for buyers who may need to secure a larger mortgage to purchase a property. On the bright side, not everyone is experiencing an increase in their home loan size. In some cities, new mortgage sizes are stabilising or even decreasing slightly.
Across Australia, the ‘average’ new mortgage reached a record high of $626,055 as of May 2024, according to the Australian Bureau of Statistics. This is up from $584,607 in May 2023. This means you’d need to make mortgage repayments of about $3,875 per month, assuming a 30-year principal and interest home loan at 6.3%.
However, the ABS data reveals significant variation in new loan sizes across different states and territories:
No matter where in Australia you are buying a home, managing a home loan can be stressful, especially when interest rates are high. Therefore, it’s important to find ways to ease the pressure.
Choosing an offset home loan, for example, can help lower your monthly interest charges by allowing you to utilise spare cash. This not only helps build a savings buffer but also reduces the overall interest you pay on the loan, bringing down the balance quicker.
If substantial savings are unlikely, seeking a loan that permits small, extra repayments at no additional cost can be a strategy to pay down the loan sooner and save on interest costs. Even something as simple as switching from monthly to fortnightly loan repayments can lead to savings on interest repayments over the loan's duration. Paying half the monthly amount every fortnight can result in paying the equivalent of an extra month’s repayments each year, helping you progress with the loan without severely impacting your household budget.
What matters is discussing your needs with us to find a mortgage that suits your unique requirements, offering beneficial features and a competitive interest rate. So, if you’re eyeing a potential new home or just want to assess your borrowing capacity, get in touch with us today.
In Townsville, a vibrant city in Queensland, the property market has seen notable changes. Many buyers are seeking home loans to secure their dream homes in this growing region. Similarly, areas like Brisbane and the Gold Coast have experienced shifts in mortgage trends, with potential homeowners exploring refinancing options to manage their home loan balances more effectively.
Whether you're looking in Townsville, Brisbane, or the Gold Coast, it's crucial to stay informed about the latest home loan and mortgage trends to make the best financial decisions for your future.
To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au.
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