How NT landlords avoid the huge pain of returning to Australia

Residents are making $5500 more a year in mortgage payments than a decade ago, but remain the best in the country with some areas recording increases of up to $22,000 a year.

A Market Compare analysis revealed that the national average loan size has increased by 67 percent since 2015 and payments have increased by $1588 per month and $19,056 per year.

In the Valley, the average home loan increased 20 percent, from $402,000 10 years ago to $481,000 today.

This pushed NT’s average monthly payment from $2272 to $2731, a change of $5508 per year.

Homeowners in Queensland were worse off with the median annual mortgage payment rising by $22,524 a year, with increases of $21,888 in NSW, $21,012 in SA and $17,220 in WA.

Adam Cullen, owner and operator of Mortgage Choice Darwin City said although Territorians had the lowest mortgage rates, any change would have an impact.

He said:

“And the use of loans can change very quickly.

“Slight movements in the market can have a big impact especially if the loan is 85-90 percent of the property value.”

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Mr Cullen said home ownership remained more accessible in the NT than in other states and territories, with Darwin home prices the lowest of all major cities, but there were still barriers, particularly for first-time buyers.

“You can still buy a quality house in the $600,000 price range in Darwin,” he said.

“However, our (First Home Guarantee Scheme) limit is only $600,000.

“Sydney’s maximum increase was equal to our total, from $900,000 to $1.5m.

“We have a bad grade, we have a small population and we have a cyclone code, all of which add to the cost of construction.

“We need to have purchase limits that reflect the characteristics of the Territory.”

A Compare the Market analysis showed that the average mortgage loan size has increased 67 percent nationwide since 2015.

Home loan sizes increased by 99 per cent in SA, 92 per cent in QLD, 66 per cent in WA, 63 per cent in NSW, 59 per cent in the ACT, 52 per cent in VIC and 20 per cent in the NT.

Compare Market property expert Andrew Winter said for many Aussies, the struggle wasn’t getting into the housing market, it was staying within.

“The road to home ownership in Australia is not an easy one, and these statistics tell us why,” he said.

“Most of the time, it is emphasized to increase the deposit, but for many, the real challenge starts when they start paying the money they have borrowed.

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A Market Compare analysis showed the average home loan size has increased 67 percent nationwide since 2015. Photo: realestate.com.au

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“Average home payments in big cities are cheap and unaffordable for most working Australians.

“Therefore, although the government has done a good job of helping people in the market by reducing the amount of money they need to maintain deposits, they have not yet reached the root of the issue.

“And if the rate goes up again this year, I think a lot of people will really feel it.”

Compare Market research found that a 0.25 percent rate hike could add $110 to monthly payments on the average mortgage of $694,000 – that’s $1,320 more per year.

The president of the Real Estate Buyers Agents Association of Australia, Melinda Jennison, said the payments were increasing the borrowing power of the restricted and impacting the household budget.

“Payments are increasing as quickly as credit levels are rising,” he said.

“For existing homeowners, higher repayments mean a greater proportion of household income is redirected towards mortgages, reducing discretionary spending and leaving less buffer against cost-of-living shocks.

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Mortgage performance is a big problem. Photo: Che Chorley

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“For newcomers, the challenge is not only to save the deposit, but to work well.

“Many buyers can get the right deposit but still fall short of lenders’ screening standards and cost-of-living standards, limiting their ability to borrow effectively.”

Mr Winter said it was important for home owners and home buyers to shop around for the cheapest prices, to keep their payments as low as possible.

“The small difference between rates may not sound like much but remember it could mean paying hundreds or thousands of dollars less over the life of your loan,” he said.

“If you own an existing home, rising rates are bad news, and the cost of ownership is high.

“However, there is a good thing, increased prices mean increased equity.

“Lenders like homeowners with better loan-to-value ratios, and that balance can be a leverage when negotiating.”