Below are some statistics you might find interesting - or baffling - and ones you can rely on to settle whatever argument you're trying to make, compiled from the likes of the Australian Bureau of Statistics (ABS) and the Reserve Bank of Australia (RBA).
Average Home Loan Interest Rates
Since then, interest rates have started to climb, as seen in the chart below. Fixed-rate home loans, which at one point enjoyed their time in the sun, initially bounced back more sharply than variable loans, but this has turned in recent months.
Home Loan Rates vs RBA Cash Rate
The Reserve Bank's cash rate target is essentially Australia's base risk-free interest rate for the banks. Comparing it with the banks' standard variable rates (SVR) shows the margins in which the banks are operating. From 2019 through to early 2022, the RBA sent the cash rate to record lows at a rapid pace - SVRs decreased drastically too, but not quite as rapidly as the cash rate, as seen by the wider gulf during that period.
Average Home Loan Size
The current average home loan size for owner occupiers is $610,000 for owner occupiers; $638,000 for investors; and $510,000 for first home buyers.
Record-low interest rates during the Covid pandemic meant borrowers were able to borrow more to finance a home purchase. Rather than see it as a money saving opportunity, Aussies found themselves with better purchasing power, helping to bid-up the price of dwellings across the board.
The average amount that owner occupiers refinance is $522,000, while it's $575,000 for investors. This includes internal and external refinances, where internal means asking their current lender for a better deal.
At the risk of sounding like a broken record, refinancing values generally took off in the Covid pandemic as home loan customers rushed to find a better deal.
As interest rates started to rise again, refinancing reached new record highs as customers sought a better deal before they couldn't. However the level of refinancing in late 2023 started a steep decline, implying many borrowers already in the system are unable to find better deals, or unable to refinance at all.
There's every chance with rising interest rates and reduced serviceability, some home owners will be stuck paying a noncompetitive rate yet unable to refinance - dubbed a mortgage prison.
Average Refinancing Value
As interest rates plummeted and home values increased during the Covid pandemic, customers refinanced increasingly large debts. Refinancing is generally only recommended if borrowers have at least 20% equity, lest they want to pay lenders mortgage insurance (LMI).
Owner Occupiers vs Investors
Owner occupiers in any given month make up around two-thirds of the number of new home loans written.
Owner occupiers have generally been a larger class of borrower than investors. This was more pronounced from around 2017 to 2018 when new lending restrictions were put in place for investors. It took around four years for lending values to recover and for investors to re-enter the market at previous levels.
First Home Buyers
First home buyers can be either investors or owner occupiers, and are an interesting subset of borrower to look at. They tend to borrow less on average, as mentioned earlier, and could be more sensitive to interest rate rises and high home prices. Towards the end of 2020, first home buyer values were at all-time highs but as home prices reached lofty heights, they tended to pull out of the market.
Fixed vs Variable-Rate Home Loans
As the RBA cash rate hit all time lows, and funding for big banks reached all-time highs, the share of new home loans on fixed rates skyrocketed. At one stage they made up nearly half of all new home loans written in mid-2021.
However, as rate rises started to bite, the popularity of fixed-rate loans plummeted, below even pre-pandemic levels. Variable-rate home loans reign supreme, with fixed-rate loans making up less than 5% of new loans coming into the market (including refinances).
Interest-Only Home Loans
Interest-only home loans used to be a lot more popular, particularly among investors where they were the payment type of choice at one stage. However the long period of record-low interest rates made paying off the principal a lot easier, driving down the use of interest-only loans. Interest-only home loans also plummeted in popularity when new regulations for investors were introduced in 2017.
Annual Housing Credit Growth
Annual housing credit growth is a useful marker as to how much Australians love loading themselves up with debt. After investor regulations were introduced in 2017, credit growth to that sector took a nosedive, even turning negative. It has not yet returned to its highs experienced earlier in the 2010s. Since interest rate rises took effect in mid-2022, credit growth for owner occupiers has come off the boil as well.
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