According to new research from MLC, the Australia today report, paying off the mortgage is the new Australian dream, with almost 80 per cent of Australians placing outright home ownership as their most important priority.
While we dream of owning our home outright, it’s our mortgage that’s become our biggest burden. MLC’s research shows that if gifted with $50,000, Australians across all social grades would put more than half on their mortgage, with the majority agreeing that their mortgage has a “big impact on my lifestyle”.
Sold …and mortgaged
So how much do homes cost, on average, and how big are our mortgages?
Alarmingly, the average annual full time salary, at approximately $80,000* is less than one eighth of the average cost of an Australian home today at $612,200.^
In contrast to rising house prices, wages growth has remained relatively flat, so Australians are borrowing more. Figures from Australian Financial Group show that the average size of new mortgages nationally in December 2014 was $444,000.
In NSW the average mortgage size was the highest at $544,000, followed by:
Victoria – $439,000,
WA – $428,000,
NT – $375,000,
Qld – $374,000 and
SA – $349,000.~
Most financial professionals recommend a mortgage repayment of no more than 28 per cent of your monthly income or two/two and a half times your gross annual salary. With average new mortgages more than four times the average national wage, it’s very possible that our dream to own our home may stay that way.
* Australian Bureau of Statistics, May 2015
^ Australian Bureau of Statistics, Sept 2015
~ Source: Australian Finance Group, Dec 2014