top of page

How do you compare: how much of your pay goes to your mortgage?

  • Writer: Dave Barbeler
    Dave Barbeler
  • Mar 25, 2021
  • 2 min read

The property market is going through a boom phase, which means housing affordability is getting tougher. So how much does the average Australian household need to put towards their monthly home loan repayments in the current market? Let’s take a look.


You’ve probably noticed the housing market is going a bit crazy at the moment.


FOMO has taken hold and many properties across the country are selling well above their reserve.


As such, housing affordability has deteriorated, says Moody’s Investor Service, reversing the improving trend seen in 2020 during the peak of the coronavirus crisis.


So what percentage of a pay cheque goes towards a typical home loan?


On average, two-income households need to put aside a quarter (24.6%) of their monthly income to meet repayments on a new home loan, as of February 2021.


That’s up from 22.7% in June and July 2020, when new mortgages were the most affordable they’ve been in a decade.


The deterioration in housing affordability was evident in all capital cities over the five months to February 2021, with Perth remaining the most affordable and Sydney the least.


That said, housing affordability still remains better than the ten-year average of 26.1% and well under its peak of 30.7% in April 2011.


That’s because the average mortgage interest rate has nearly halved to 3.65% since 2011, according to Moody’s.


Want to know how much you can borrow?


Got your eye on an exciting new property and want to know if you can get a loan for it?


Get in touch today and we’ll help you crunch the numbers, work out your borrowing capacity, and discuss your finance options.


Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.


 
 
 

Comentarios


Featured Posts
  • Instagram - White Circle
  • Facebook - White Circle
  • LinkedIn - White Circle
  • Google+ - White Circle

Name *

Email *

Subject

Message

Success! Message received.

Disclaimer: Financial Solutions (ABN: 41 701 190 619) is a corporate authorised credit representative (Credit Representative Number 534111) of the Welfare Fund Ltd (Australia Credit Licence Number 423050 ABN: 25 155 698 105. Financial Solutions is also a referral partner of TJL insurance Pty Ltd (Australia Financial Services Licence Number 478959 ABN: 98 613 453). 

 

Financial Solutions has access to a panel of lenders through National Mortgage Brokers Pty Ltd (ACN 093 874 376 / Australian Credit Licence 391209), which is a fully-owned subsidiary of Liberty Financial Pty Ltd (ACN 077 248 983 / Australian Credit Licence 286596).  Financial Solutions has access to products including those from Liberty Financial.

The information on this website is of a general nature to give an indication of insurance products, financial services and mortgage products. It should not be considered financial advice and does not take into account specific and individual circumstances. Appropriate professional advice should be sought from accountants, solicitors and financial advisers before obtaining a product that takes into consideration individual circumstances.

* the home loan with the lowest current interest rate is not necessarily the most suitable for your circumstances, you may not qualify for that particular product, and not all products are available in all states and territories.

^ Cashback offers are only provided by selected lenders and are subject to their normal lending criteria. Offers may only be available to specific loan products.

© 2016 by Finacial $olutions. 

bottom of page