How NT mortgage holders avoid Australia’s worst repayment pain – realestate.com.au

Territorial residents are spending $5,500 more per year on mortgage repayments than they did a decade ago, but remain best off in the country, while other jurisdictions are seeing increases of up to $22,000 per year.

Analysis by Compare the Market found that the national average loan size had increased by 67 percent since 2015, with repayments of $1,588 per month and $19,056 per year.

In the area, the average mortgage loan has increased 20 percent, from $402,000 a decade ago to $481,000 today.

This increased the average monthly loan payment from $2,272 to $2,731, a change of $5,508 per year.

Queensland homeowners fared the worst with annual average loan repayments of $22,524 per 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 saw the lowest increase in mortgage repayments, any change would have an impact.

“If you look at an additional $5,500 in repayments per year, that’s almost $500 per month,” he said.

“And loan repayments can change quite quickly.

“A small movement in the market can have a significant impact, especially when a loan is 85-90 percent of the property value.”

In the area, the average mortgage loan has increased 20 percent, from $402,000 a decade ago to $481,000 today. Image: realestate.com.au

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Mr Cullen said home ownership in the NT remained more attainable than in other states and territories, with the average house price in Darwin being the lowest of all 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 cap was equal to our overall cap, from $900,000 to $1.5 million.

“We have the tyranny of distance, we have a limited population and we have cyclone coding, all of which add to the cost of construction.

“We need purchasing limits that reflect the characteristics of the area.”

The Compare the Market analysis found that the average size of home loans has increased by 67 percent nationally since 2015.

Home loan volumes increased by 99 percent in SA, 92 percent in QLD, 66 percent in WA, 63 percent in NSW, 59 percent in ACT, 52 percent in VIC and 20 percent in NT.

Compare market property expert Andrew Winter said for many Aussies the struggle was not to get into the housing market, but to stay in.

“The road to home ownership in Australia is not easy, and these figures tell us why,” he said.

“So often the emphasis is on attracting a down payment, but for many the real challenge begins when they start paying off their loan.

The Compare the Market analysis found that the average size of home loans has increased by 67 percent nationally since 2015. Photo: realestate.com.au

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“Repayments on average homes in our capital cities are not cheap and for many working Australians they are simply not affordable.

“So while the government has done a good job of helping people get into the market by reducing the amount of money they need to save for a down payment, they haven’t really gotten to the heart of the issue.

“And if the spot rate rises again this year, I think a lot of people will really feel it.”

Compare Market research has shown that a single 0.25 percent increase in cash interest rates can add $110 to monthly payments on an average $694,000 loan – that’s $1,320 more per year.

Melinda Jennison, president of the Real Estate Buyers Agents Association of Australia, said the repayment increases limited borrowing power and impacts household budgets.

“Repayments are scaling rapidly as debt levels rise,” she said.

“For existing homeowners, higher repayments mean more of the household income goes towards the mortgage, reducing discretionary spending and leaving less cushion for cost-of-living shocks.

The usability of a mortgage is a major problem. Photo: Che Chorley

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“For newcomers, the challenge is not just saving a down payment, but also usability.

“Many buyers may have a deposit ready but still fall short of lenders’ assessment rates and cost-of-living benchmarks, which effectively limit borrowing power.”

Mr Winter said it is crucial for homeowners and home buyers to shop around to get the cheapest rates to keep their refunds as low as possible.

“A small difference between rates may not sound like a big deal, 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, higher rates are bad news and the cost of ownership is high.

“However, there is a positive effect, higher values ​​mean greater equity.

“Lenders like homeowners with better loan-to-value ratios, and that equity can be a powerhouse when you negotiate.”