What is the average home loan in Australia?
Australia is known for its good quality of life, but when it comes to living cost…the numbers can be pretty crazy. Apperantly, real estate is a national obsession down there.
written by: Zoli – Continent Surfer
According to this year’s statistics, there are currently around 10.3 million properties across Australia, and out of these, 6 million properties have mortgages against them. The ANZ (Australia and New Zealand Banking Group Limited) estimates that foreigners own between 2.5 – 4% of Australia’s housing stock which is significant, especially considering that the current level of foreign buyer activity is much stronger than in the past.
How much is an average mortgage cost in Australia?
It is obviously different in every state:
- New-South Wales: $761,000
- Victoria: $590,000
- Australian Capital Territory: $578,000
- Queensland: $519,000
- South Australia: $492,000
- Western Australia: $472,000
- Northern Territory: $470,000
- Tasmania: $433,000
Is this what a home costs?
No. Many times more, the figures above only show the average borrowed amount. Smaller flats you can get cheaper in the cities or in better districts. You can find homes on Australia’s biggest real estate website. If you go to the countryside, you can also find homes at way lower price points.
How much money do they need to put down?
In general, downpayment is 20%. It could be less, like 5% or 10%, but then you’ll be subject to higher borrowing cost and higher interest rates. So the more money you have, the better.
Is it hard to buy a home?
It is never easy. People usually save up for a deposit for many years and might live with their parents so they don’t have to pay rent. The government is now considering to come up with a new option so that in future, first homeowners will have to pay a deposit of only 2% on the mortgage if they buy under a certain price point. It is all because the first home is becoming increasingly unaffordable for most people.
How long is an average mortgage?
Having a mortgage of less than 20 years is unusual, but 25 or even 30 years is becoming the norm.
Monthly repayment
These numbers are crazy!
Let’s say that you repay both the principal and interest on a 30-year mortgage:
- assuming you borrowed “only” $500,000 at a 6.34% annual interest you would pay is approx $3,108 each month
- if you have borrowed $600,000 at a 6.34% interest rate, that will set you back about $3,730 a month
Let’s see the same with a 20-year mortgage:
- if you borrowed $500,000 and 6.34% interest, you will need to pay $3,681 a month
- when borrowing $600,000 at 6.34% interest, that will need you to pay $4,418 every single month
Can we buy a property in Australia without a PR or citizenship?
It is not impossible, but it is very expensive and you must get permits to do that. Without permanent residency or citizenship you usually don’t have a proper credit score. That means you will get way with much worse terms on a mortgage. Better terms are available for permanent residents and Australians, so most people usually wait until they can acquire their citizenship. It makes sense.
Numbers are scary
Earnings in Australia will be usually higher than in most countries from which immigrants come. Numbers can sound scary when you start converting to your own currency.
Once you are in Australia and work, you will see things differently. Also, if you are a dual-income household, that helps a lot.
I strongly suggest that you DO NOT convert any of these figures into your own currency and you should not compare it to your current income level!
How many people are homeowners in Australia?
67% owner (of this 52% is mortgaged) – that means nearly 31% of the total housing market is owned outright, and of the total market 36% is mortgaged.
On top of that, the rest splits into two categories, 31% renter and 2% other.
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Did you know?
Good to know, that statistics in 2023 shows that the average amount of money for a family of four, they will need approximately AUD 6,840 a month to live comfortably in Australia!
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