Average Mortgage Australia: What to Expect with a Home Loan in 2024
How does your home loan compare to the average mortgage Australia has for its homeowners? And, perhaps more importantly, why does that matter?
Whether you’re an investor, a first-home buyer, or a homeowner considering a refinance, understanding average mortgage trends (and how your home loan compares) will empower you to make informed decisions, assess risks, and secure suitable terms. It will allow you to make plans for your financial future and ensure you retain a competitive interest rate over the life of your mortgage, despite changes in circumstances and a fluctuating national cash rate.
Average Mortgage Australia: A 2024 Perspective
The Reserve Bank of Australia (RBA) chose to leave the official cash rate unchanged at 4.35% during their first two meetings in 2024. How does this translate into the interest rates being offered by lenders?
According to the latest data from Statista, in March 2024 the average Australian mortgage for owner-occupiers had a variable interest rate of 7.24%. For those on a fixed interest rate, it was about 0.5% lower. Meanwhile, the average mortgage in Australia has increased to $624,383, the highest it’s been since records first started being kept in 2005 (in contrast, the average Australian mortgage back then was just $255,340).
This increase has been influenced by a range of factors, including population growth, government initiatives designed to assist buyers and a record-low cash rate throughout much of 2020. The result? Demand went up (and so did the prices!).
Insights into Average Mortgage Repayments
Considering the cash rate is at a 12-year high and property prices have gone through the roof, what do average mortgage repayments look like in early 2024? If we take the national average mortgage size of $624,383 and apply an average variable interest rate of 7.24%, then we can assume average mortgage repayments of $4,255 per month (for a 30-year loan).
Compared to 10 years ago (when the average rate was 4.17% and the average mortgage was $372,900), Australian homeowners are now paying $2,438 more per month, on average.
Understanding Mortgage Comparison Rates
Now that you know what the average mortgage in Australia looks like, how does yours compare? If you’re thinking your interest rate is currently lower (or higher) than the average, don’t forget to consider mortgage comparison rates.
Mortgage comparison rates are a standardised tool that can help you assess the true cost of different mortgage products. It includes not just your loan interest rates, but also any extra fees and charges that you’ll incur. By including these extra costs, mortgage comparison rates enable you to make more informed decisions when comparing mortgage offers from different lenders.
The Average Australian Mortgage: What to Expect in 2024 and Beyond
While the RBA hasn’t ruled out another cash rate rise, economists now believe this to be unlikely. In fact, the majority agree that the cash rate has now peaked and a rate cut could be expected by late 2024.
Does that mean that homeowners should just hold their breath and wait for the rate cuts? Not necessarily. While the average interest rate may be 7.24%, some lenders are still offering interest rates below 7%, so it’s crucial for homeowners to regularly assess whether their mortgage is still working in their best interests.
For example, if you had an average-sized mortgage ($624,383), and you refinanced from 7.24% to a 6.3% rate, your monthly repayments would drop to $3,865. In other words, you’d instantly be saving $390 per month – that’s $4,680 in savings during the first year alone!
Talk to North Brisbane Home Loans for Expert Mortgage Advice
While interest rates may be on hold for the moment, that doesn’t mean Australian homeowners can’t take immediate steps to reduce their average mortgage repayments. To ensure you’re not paying more than you need to be, talk to an experienced broker.
At North Brisbane Home Loans, we can provide a free home loan health check to ascertain whether you could benefit from refinancing to a lower interest rate. To find out more, book a free appointment with one of our friendly brokers.
Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.
