Home loans by the numbers: Mortgage statistics in Australia

Australians are obsessed with property. Collectively, Australia’s housing stock is worth more than $10 trillion, having surpassed the mark in mid-2022, briefly falling, then comfortably rising again through 2023 and 2024.

Melbourne and Sydney account for two thirds of that value. Two trillion dollars was added in 2021 alone, and new records are seemingly being hit every month across most capital cities. 

Even if you’re not a homeowner or part of the club, you still can’t help but find yourself talking about bathroom renovations and the property market at backyard barbecues.

However, purchasing and affording a home and a home loan are not easy feats. A home purchase will likely be the biggest financial decision a person will make in their lifetime. These are the statistics you can use to prove whatever petty argument you want to settle with friends or family, compiled from the likes of the Reserve Bank of Australia (RBA) and the Australian Bureau of Statistics (ABS).

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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Important Information and Comparison Rate Warning

Average home loan interest rates

The current average interest rate on variable owner occupier mortgages is 6.27% p.a.

• Owner occupier variable rate home loans: 6.27% p.a.

• Owner occupier fixed rate home loans (for fixed terms of 3 years or less): 5.95% p.a.

• Owner occupier fixed rate home loans (for fixed terms of over 3 years): 6.77% p.a.

• Investor variable rate home loans: 6.52% p.a.

• Investor fixed rate home loans (for fixed terms of 3 years or less): 6.44% p.a.

• Investor fixed rate home loans (for fixed terms of over 3 years): 7.50% p.a.

This includes average interest rates of new loans funded in the month. This is different from all outstanding loans as new loans provide a more acute month-by-month snapshot of what the market is doing.

Average interest rates of home loans: P&I vs IO, high LVR vs low LVR

Average interest rates of new loans funded in the month - principal & interest (P&I) versus interest-only (IO) home loan rates, plus high-LVR home loans of 81% or higher.

As a consequence of their increased risk, IO and high-LVR loans generally attract higher interest rates than ‘meat and potatoes’ 80% LVR P&I loans.

Home loans higher than 80% LVR generally require the borrower to take out a lenders mortgage insurance (LMI) policy. This can add up to thousands of dollars, and contrary to popular belief, LMI covers the lender in case of default - not the borrower.

Interest-only loans have generally waned in popularity since tightened regulations were introduced in 2017, notably affecting the investor loan sector, even though the increased oversight was unwound in 2018.

Average home loan size

The current average new loan size for owner occupiers jumped to a new record $626,000 in May 2024. For investors it's also $626,000 as of May 2024, and for first home buyers it's $534,000 - a new record.

Average home loan amounts increased sharply through the Covid-19 pandemic. This is because of record low interest rates, extra government stimulus, government cash handouts, and fewer avenues to spend money due to lockdowns and closed international borders. Rather than pocket their savings on interest, Aussies generally use their increased borrowing power to purchase bigger and more expensive homes, and bid up the price of homes with other eager borrowers.

Monthly home loan approvals

Find out how many owner occupiers versus investors are in the market on any given month. Compare how many are on P&I or interest only loans, and find out how many mortgages are on fixed versus variable terms.

Every month on average there are about 25,000 to 30,000 new owner occupier loan agreements, and 15,000 for investors. The number has cooled slightly since the RBA started increasing the cash rate in May 2022, but only when compared to record Covid-era numbers. Notwithstanding the pandemic period, people are still settling on home loans at record levels.

Owner Occupier vs Investor Numbers

Owner Occupier vs Investor Numbers - Ratio

Investor vs Owner Occupier Value

Popularity of fixed vs variable-rates

The share of new fixed-rate lending is at a record low of 1.75% as at May 2024, with much commentary suggesting we're at or near the peak in interest rates and the only way to go is down. This is compared with variable-rate loans and includes refinanced loans. The proportion of new lending on fixed rates generally soared through the pandemic, peaking at nearly half of new lending in July 2021.

This was because cheap loans provided by banks were primarily in that space. The surge in fixed-rate lending in mid-2021 meant they accounted for around a third of the total outstanding mortgage market.

However, interest rate rises and wholesale funding costs have meant fixed home loan rates have soared higher than variable rates. The end result is many homeowners are now opting for a variable rate home loan.

Percentage of monthly loan commitments on fixed rate

Housing credit growth

Credit growth measures the level of personal borrowing, and positive economic times generally corresponds to strong credit growth. The current annualised figure is 4.61% as an average of both owner occupiers and investors. This means the average level of credit, i.e. household debt in the system, is 4.61% higher than a year ago.

The growth figure is currently weaker than some of the recent highs, but this level of growth even despite record interest rate hikes is notable. It is also not a 'flow' metric, like new lending figures are, rather a 'stock' metric as a measurement of the growth of existing housing debt in Australia.

These tables encompass monthly and annual growth in the value of outstanding home loan debt.

Monthly housing credit growth

Annual housing credit growth

Interest-only borrowing

The value of outstanding interest-only loans in the market is about $239 billion, compared to an overall mortgage market worth more than $5.3 trillion.

As interest rates lowered, the popularity of interest-only loans generally plummeted, because affording both principal and interest was made more doable. Restrictions to investment interest-only lending introduced in 2017 also caused the sector to crater. 

Quarterly interest-only home loan approvals (value)

Existing interest-only home loans (value) 

Refinancing - Values and Numbers

Owner occupiers externally refinanced more than $11 billion in April 2024, down considerably from months prior, but trickling back up from recent lows of less than $9 billion.

External refers to refinancing with a new lender rather than asking for a better deal with your current one (internal).

Refinancing experienced a boom through the Covid-19 pandemic, peaking in late 2021 as mortgage holders sought a better deal. This caused a huge churn rate for lenders with some struggling to onboard new borrowers faster than those heading for the exits. A few pundits have put this down to cash handouts, and ultra-low fixed mortgage rates spurned on by the RBA’s Term Funding Facility.

Number of refinances

Value of refinances

Average value - internal and external combined

First home buyers

On average there are around 8,000 to 10,000 new first home buyers entering the market in any given month, borrowing on average $534,000. This is much less than other owner occupiers and investors.

In the early stages of the Covid-19 pandemic with home values falling slightly, there was a relative boom in loans written to first home buyers. However, as the scales tipped and home prices increased sharply, first home buyers generally struggled to compete at private treaties and auctions against other owner occupiers - and investors.

However the surging rental crisis since 2022 has caused many first home buyers to enter the market despite the hurdles of high prices and high interest rates, with elevated levels of first home buyers getting housing finance in 2024.

The number of first home buyers in the lending market.

The value of home loans made out to first home buyers.

Average first home buyer loan size

First home buyers tend to borrow less than other owner occupiers and investors. This is despite many tapping into the ‘Bank of Mum and Dad’ for help to put together a deposit. They borrowed an average of $534,000 in May 2024 - much less than the wider owner occupier cohort, but a new record in this sector. The last time owner occupiers as a whole borrowed this little was March 2021.

Australian property prices

In general, Australian property prices are back rising after a brief dip during the back end of 2022. However, it's a bit misleading to talk about 'Australian property prices' and not differentiate between regions, as the pace of growth tends to contrast wildly between different cities/states.

Photo by 2102033 on Pixabay

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