Boosted by the housing boom, mortgage values in Australia have skyrocketed by 70% over the past 18 months - from January 2020 to July 2021 - according to new analysis by global data, analytics and technology company Equifax.

During this timeframe, total mortgage limits have increased by $110 billion or 5.6%.

As house prices continue to accelerate, increased mortgage limits will impact the loan serviceability for both new and existing homeowners according to Equifax.

Average individual mortgage debt increased by 2.7%, or an average of $13,100.

Additionally, 190,000 first home buyers entered the housing market throughout this time, making up 23% of newly-opened mortgage applications.

Comparatively, homeowners refinancing made up 35% of mortgage applications; 26% took out new financing for renovations; and 16% took out additional financing.

Kevin James, Equifax General Manager Advisory and Solutions, said it's good to see more first home buyers in the market with encouragement from government incentives.

"Still, it is worrying that mortgage limits are growing at a rate faster than most homeowners' ability to service their loans," Mr James said.

Mortgagees scrapping credit cards to stay on top of home loans

Even before APRA tightened home loan lending rules, prospective homeowners have been 'increasingly aware' of the challenges they'll face to meet their mortgage repayments.

In response, many were already taking steps to improve their financial situations.

According to Equifax's data, mortgage borrowers are a 'standout group' that have steadily scrapped credit cards over the past 18 months.

Within the 'typical' first home buyer demographic (under 30 years old), 24% cut their credit cards.

Additionally, 12% of people between 30 to 40 years old have given up their credit cards.

East coast home to more first home buyers

First home buyers are more common on the Australian east coast according to Equifax.

Loans for first home buyers rose by 12% in Greater Sydney and 14% throughout the rest of the state.

Mortgages also increased by 10% in Greater Melbourne and 9% throughout Greater Victoria.

Queensland's mortgage sizes increased by 13% in Greater Brisbane and 10% across the rest of the Sunshine State.

In comparison, Western Australia saw first home buyer home loans rise by 6% in Greater Perth and 7% throughout the rest of state.

"The size of first home buyer grants are similar across the board; however, disparities in the cost of living and the housing market opportunities in each state continue to be key contributing factors that are pricing mortgage borrowers out of the market, particularly in NSW and Victoria," Mr James said.

Pandemic dampened demand of new home owners across the board

Despite the volume of mortgage enquiries increasing over time, lockdowns in NSW and Victoria 'tempered' the enthusiasm of prospective buyers to enter the property market.

Mortgage enquiries peaked in March 2021, when enquiries rose by 82% in NSW, 59% in Victoria, and an average of 72% across the country. 

However, there was a 'collective downturn' in May and June 2021 as lockdowns and restrictions were put in place.

"Mortgage enquiry volumes are a strong indicator of future loan take-outs, and economic developments related to the pandemic will continue to steer borrowers’ sentiment for many months to come," Mr James said.

"We will be monitoring volumes closely as the economy reopens in states emerging from lockdowns to see how this will flow through to the mortgage market."


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.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
Principal & Interest
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Image by Steve Smith on Unsplash

Ready, Set, Buy!

Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!

With bonus Q&A sheet and Crossword!

By subscribing you agree to our privacy policy