Territorians are forking out $5500 more a year on mortgage repayments than a decade ago, but remain the best off in the country with other jurisdictions recording increases of up to $22,000 a year.
Analysis by Compare the Market revealed the national average loan size had increased 67 per cent since 2015 with repayments up $1588 a month and $19,056 a year.
In the Territory, the average home loan rose 20 per cent, from $402,000 10 years ago to $481,000 today.
This pushed the NT’s average monthly loan repayment from $2272 to $2731, a change of $5508 a year.
Homeowners in Queensland had it worst with annual repayments on an average loan up $22,524 a year, while the increase was $21,888 in NSW, $21,012 in SA and $17,220 in WA.
Adam Cullen, owner and operator of Mortgage Choice Darwin City said while Territorians had the lowest increase in mortgage repayments, any change was going to have an impact.
“When you look at $5500 extra in repayments a year, that almost $500 a month,” he said.
“And the servicing of loan can change quite rapidly.
“Slight movement in market can have significant impact especially when a loan is 85-90 per cent of the property value.”
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In the Territory, the average home loan rose 20 per cent, from $402,000 10 years ago to $481,000 today. Picture: realestate.com.au
Mr Cullen said homeownership remained more achievable in the NT than in other state and territory, with the median Darwin home price the lowest of any capital cities, however there were still hurdles, especially for first time buyers.
“You can still buy a good quality house in the $600,000 price range in Darwin,” he said.
“However, our limit for the (First Home Guarantee Scheme) is only $600,000.
“The increase Sydney got to their limit was equivalent to our total cap, from $900,000 to $1.5m.
“We have the tyranny of distance, we have limited population and we have cyclone coding, which all add to build cost.
“We need to have purchase limits that reflect the features of the Territory.”
The Compare the Market analysis showed the average home loan size surged 67 per cent nationally since 2015.
Home loan sizes were up 99 per cent in SA, 92 per cent in QLD, 66 per cent in WA, 63 per cent in NSW, 59 per cent in ACT, 52 per cent in VIC and 20 per cent in NT.
Compare the Market property expert Andrew Winter said for many Aussies, the struggle wasn’t getting into the housing market, it was staying in.
“The path to homeownership in Australia isn’t easy, and these figures tell us why,” he said.
“So often the emphasis is put on raising a deposit but for many the real challenge begins when they start servicing their loan.
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The Compare the Market analysis showed the average home loan size surged 67 per cent nationally since 2015.. Picture: realestate.com.au
“Repayments on average homes in our capital cities aren’t cheap and for many working Australians they just aren’t affordable.
“So, while the government has done some good work helping people into the market by reducing the amount of money they need to save for a deposit, they haven’t really gotten to the heart of the issue.
“And if the cash rate goes up again this year, I think a lot of people are really going to feel it.”
Compare the Market research found a single 0.25 per cent cash rate increase could add $110 onto monthly repayments on an average loan of $694,000 – that’s $1,320 more a year.
Real Estate Buyers Agents Association of Australia president Melinda Jennison said repayment increases restricted borrowing power as well as impacting household budgets.
“Repayments scale quickly as debt levels rise,” she said.
“For existing homeowners, higher repayments mean a bigger share of household income is redirected to the mortgage, reducing discretionary spending and leaving less buffer for cost-of living shocks.
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The serviceability of mortgage is a big issue. Picture: Che Chorley
“For new entrants, the challenge isn’t just saving a deposit, it’s serviceability.
“Many buyers can have a deposit ready but still fall short under lenders’ assessment rates and living-expense benchmarks, which effectively caps borrowing power.”
Mr Winter said it was crucial for homeowners and homebuyers to shop around to secure the cheapest rates, to keep their repayments as low as possible.
“A little difference between rates may not sound like much but remember it could mean paying hundreds or even thousands of dollars less over the life of your mortgage,” he said.
“If you are an existing homeowner, increased rates are bad news, and the cost of ownership is high.
“However there is a positive, increased values means increased equity.
“Lenders love homeowners with better loan-to-value ratios, and that equity could be a power leaver when you negotiate.”
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