Residential property prices in Australia’s eight capital cities experienced some of their strongest ever growth over the past year. So, how much would a mortgage on an average property cost now?
According to the latest figures from the Australian Bureau of Statistics (ABS), residential property prices rose 23.7 per cent through the year to December quarter 2021; the strongest annual growth since the Residential Property Price Index series began in the September quarter 2003.
During 2021, five of Australia’s capitals experienced their largest annual rise in residential property prices on record: Hobart (+29.8 per cent), Canberra (+28.8 per cent), Brisbane (+27.8 per cent), Sydney (+26.7 per cent), and Adelaide (+23.9 per cent).
Looking just at the December 2021 quarter, residential property prices rose 4.7 per cent across the eight capitals. The strongest quarterly price growth was recorded in Brisbane (+9.6 per cent), followed by Adelaide (+6.8 per cent), Hobart (+6.5 per cent), and Canberra (+6.4 per cent).
In dollar values, the total value of Australia’s 10.8 million residential dwellings rose by $512.6 billion to $9,901.6 billion in the December quarter 2021, resulting in a mean residential dwelling price of $920,100; up from $876,100 in the September quarter 2021.
So based on these figures, how much could a home owner expect to pay for a mortgage on a property in one of Australia’s eight capital cities?
To buy a $920,100 property, a borrower would need to have first saved up a 20 per cent deposit of $184,020 and borrow the remaining $736,080. It would also be possible to apply for a mortgage with a deposit of 10 per cent ($92,010) or even five per cent ($46,005) of the property value, but that would require also adding Lender’s Mortgage Insurance (LMI) to the upfront costs, or getting support from a guarantor or a government support program.
Assuming an owner occupier was making monthly principal and interest repayments at a variable rate of 2.52 per cent (the average rate for new loans in January 2022 according to the RBA) over a 30 year term, the loan costs may break down as follows:
Deposit | Loan amount | Monthly repayment | Total interest | Total loan cost | Total amount paid (including deposit) |
| $184,020 (20%) | $736,080 | $2916 | $313,704 | $1,049,784 | $1,233,804 |
| $92,010 (10%) | $828,090 | $3281 | $352,917 | $1,181,007 | $1,273,017 |
| $46,005 (5%) | $874,095 | $3463 | $372,523 | $1,246,618 | $1,292,623 |
Source: Moneysmart. Does not include fees or other charges (including LMI charges), and assumes that the interest rate will stay the same over the full loan term. This example is for illustrative purposes only.
Company | Product Budget Home Loan Real Time Rating™ | Interest Rate  2.84 % p.a Variable | Comparison Rate* 2.85 % p.a | Repayment $1,398 monthly | Real Time Rating™ | Go to site | |
Company | Product Fixed Rate Home Loan (with Advantage Package) Real Time Rating™ | Interest Rate 5.24 % p.a Fixed - 2 years | Comparison Rate* 5.22 % p.a | Repayment $1,310 monthly | Real Time Rating™ | Go to site | Cashback Receive $4000 in cashback when you refinance |
Company | Product Base Variable Rate Home Loan Real Time Rating™ | Interest Rate 3.74 % p.a Variable | Comparison Rate* 3.78 % p.a | Repayment $1,541 monthly | Real Time Rating™ | Go to site | Cashback $2,000 cashback when you refinance a loan of $250,000 or more |
Company | Product Live-in Variable Real Time Rating™ | Interest Rate 2.59 % p.a Variable | Comparison Rate* 2.60 % p.a | Repayment $1,359 monthly | Real Time Rating™ | Go to site | special Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply. |
