Geelong homeowners’ $453,000 mortgage increase in 10 years

Homeowners are now paying $453,000 more for a typical loan compared to a decade ago, new research has found.

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Victorian homeowners are now paying $453,000 more for a typical loan compared to a decade ago, amid fears interest rate hikes this year could push families to the brink.

New research from online financial comparison service Compare the Market shows the state’s average $427,000 mortgage of 2015 surged to $647,000 by 2025, despite similar interest rates across both timelines.

MoneySmart estimates show Victorians paying the average loan in 2015 would have coughed up $441,951 in interest repayments to their bank over a 30-year loan – totalling about $869,000 to clear the mortgage.

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By 2025 that three-decade interest figure had surged to $675,500 with the total cost of paying off the loan, including the principal, now a whopping $1.322m – about $453,000 more than 10 years ago.

Compare the Market property expert Andrew Winter said for many people the struggle wasn’t just getting into the market, but rather staying in their home.

“Repayments on average homes in our capital cities aren’t cheap and for many working Australians they just aren’t affordable,” Mr Winter said.

“And if the cash rate goes up again this year, I think a lot of people are really going to feel it.”

Gaurav and Trish Sharma with their 19-month-old daughter Anairaa at their home. Home loans have been on the rise in the last 10 years and the couple have recently sold their investment property. Picture: Ian Currie

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The Reserve Bank is due to next meet on February 3, with both the Commonwealth Bank and NAB expecting a rate increase of 25 basis points.

Mr Winter said homeowners and buyers should shop around to secure the cheapest interest rates possible, a step which could help save thousands of dollars across the life of a mortgage.

Compare the Market analysis of PropTrack median price data shows Anglesea, Jan Juc and Barwon Heads’ loan repayments for houses would have all increased by more than $3000 a month, and upwards of $36,000 a year, since 2015.

The suburb’s typical house prices range from Barwon Heads’ $1.44m to Jan Juc’s $1.31m.

Real estate guru Andrew Winter said homeowners should shop around for the best deals. Picture: Luke Marsden.

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Across urban Geelong, loan repayments for houses in Newtown, Highton, East Geelong and Herne Hill, would have increased by more than $1700 a month, and upwards of about $21,000 a year since 2015.

The lowest annual mortgage increase for houses was Armstrong Creek’s $12,505, based on a $665,000 median house price in 2025.

Next was Norlane on more than $13,700 with a $470,000 median and Curlewis, at $14,756.09 with a $657,500 median.

The repayments are based on a 30-year loan paying principal and interest, assuming a 20 per cent deposit.

My Budget founder Tammy Barton said another interest rate rise could push households further into stress. Picture: Naomi Jellicoe

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Budgeting and money management service MyBudget founder and director Tammy Barton said for already-stretched households another rate rise could push them from “just coping, into real financial stress very quickly”.

“We’re seeing pressure right across Australia, but it’s particularly tough in areas with higher property prices and larger loan sizes,” Ms Barton said.

“In Victoria, for example, even small movements in interest rates translate into much bigger dollar impacts on repayments.”

Her advice for people struggling with housing and other costs was to seek help before their situation reached crisis level.

“Acting early gives you more options – that might mean speaking to your lender about hardship arrangements, reviewing your loan or doing a proper reset of your household budget to prioritise essentials,” Ms Barton said.

“Try building even a small emergency buffer for when things get difficult, and importantly, getting support early can stop short-term pressure turning into long-term stress.”

GEELONG LOAN PAYMENT INCREASE OVER 10 YEARS

Source: Compare the Market, PropTrack. Repayments are based on a 30-year loan paying principal and interest, assuming a 20% deposit, with variable interest rates of 5.46% in 2015 and 5.5% in 2025.