New data shows the gap between property dreams and deposit reality is widening
Australian home loan sizes have climbed nearly 8% over the June quarter as rising property prices continue to push borrowing requirements higher, new data reveals.
The average loan submission size reached $639,371 nationally, up 7.7% year-on-year, according to Mortgage Choice’s latest Home Loan Report released today.
Western Australia recorded the largest growth in average loan size, surging 12.7% year-on-year to $569,405, while New South Wales and the ACT maintained the highest average at $728,592.
“To put the average loan size into perspective, a borrower aiming for a 20% deposit would need to have at least $160,000 saved to secure a property valued at $800,000,” said Mortgage Choice CEO Anthony Waldron.
The rising loan sizes reflect broader property market pressures, with national home prices hitting a record in July according to the PropTrack Home Price Index, up 4.9% year-on-year.
The extended saving timeline is affecting prospective buyers significantly. Almost one-third of survey respondents said it took five years or more to save their home loan deposit, transforming what was once a short-term goal into a long-term financial strategy.
“As loan sizes continue to climb, for most Australians, saving for a home loan deposit has become a marathon, not a sprint,” Waldron said.
Queensland recorded an 8.8% increase in average loan size to $603,547, while Victoria and Tasmania saw a 5.1% rise to $645,526. South Australia and the Northern Territory experienced a 5.3% increase, bringing the average to $585,526.
The data, drawn from Mortgage Choice home loan submissions and a nationally representative survey of 1,000 consumers, highlights the growing financial commitment required for homeownership.
With buyers spending years accumulating deposits, Waldron recommended prospective purchasers engage with mortgage brokers early in their saving journey to better understand their options and work towards property goals.
Waldron said that the extended saving periods provide an opportunity for buyers to build knowledge and confidence in the market, though the rising entry costs continue to challenge affordability for many Australians.
Property price increases across all regions contributed to the loan size growth, with the trend expected to continue as housing demand remains strong despite affordability pressures.
