Ever wondered whether your mortgage is bigger, smaller or the same as everyone else in the country?
Now you can compare your mortgage to the averages in Australia. According to the Australian Bureau of Statistics (ABS), the average Australian mortgage is $299,800.
This is the average mortgage size across all Australian states (NSW, VIC, QLD, NT, WA, ACT, TAS).
This figure is based upon the average of all mortgagees surveyed in the most recent Census survey data, meaning it is more likely to be accurate and less biased than that of figures released by say a bank, financial institution or mortgage broker.
The average Australian mortgage, broken down by state
According to Mortgage Choice spokesperson Jessica Darnbrough the average mortgage size (in 2013) by Australian state is as follows:
- NSW/ACT: $297,000
- VIC/TAS: $294,000
- QLD: $257,000
- SA/NT: $226,000
- WA: $332,000
This shows that most states are pretty close to the Australian average, however some states like WA and NSW have experienced faster economic growth and in turn house prices are rising heavily above the average. This makes buying and renting more expensive in these respective two states.
If you are renting or looking to buy, South Australia would appear the cheapest and is a potential way to enter the property market for those who cannot buy into their home state.
How has the average mortgage in Australia increased over the past 10 years?
The average mortgage size has almost doubled in 10 years according to further ABS data. In 2001, the average loan size was approximately $150,000. Fast forward to 2013/2014 and the average home loan size has grown to nearly $300,000.
You now know the average mortgage size, do you feel your mortgage is too big?
If you already hold a mortgage, there is a big chance you will look at these figures and think to yourself; ‘my mortgage is huge’. That is because these figures are simply averages, meaning odds are if you live in one of the more expensive states, you probably have a mortgage far greater than these numbers.
Don’t fear if your mortgage size is much bigger than the averages. Remember, these numbers are what people ‘owe’ and not what the property is actually worth. You may have a bigger mortgage, but you may also have a property that is worth significantly more.
What can you do to become ‘above average’ and get ahead on your mortgage?
According to Alex Wilson, Money Expert at SavingsGuide.com.au there are many ways to become above average and pay off your mortgage quickly. Here are some actionable tips:
- Keep your savings inside your mortgage; pay less interest.
- Get the best rate home loan you can; use the money you save to pay down the mortgage.
- Avoid fancy mortgage options; all you need is a good rate and willpower to pay it off.
- Set your minimum repayments much higher.
- Get a portion of your salary directly credited to your mortgage.
- Once you put a dollar on your mortgage, never withdraw it.
- Don’t consolidate credit card debts into your mortgage as it makes the debt last longer.
- Pay lump sums onto your mortgage; a big deposit will shaves year off your loan.
- Any investment earnings you make, use them to pay down the mortgage.
- If you get a pay raise, halve the extra money you make and pay it towards the mortgage.
- Try to set your repayments as often as you possibly can.
- Don’t leverage yourself too far; if interest rates go up, you need to afford the new repayments.
- Look at the comparison rate when choosing a home loan; the interest rate is only half the equation.
- Use the debt snowball method to repay bad debts so you can focus on your mortgage long term.