Home Loan
Statistics

As of May 2026, the average variable home loan interest rate was 6.2% p.a. for owner-occupiers and 6.4% p.a. for investors, according to RBA data.

Fixed rates were slightly lower, with fixed-rate loans of three years or less averaging 6.1% p.a. for owner-occupiers and 6.2% p.a. for investors.

How long does it take to pay off a mortgage?

The standard home loan term is 30 years, but making extra repayments can reduce this significantly. On the national average owner-occupier loan of $735,000 at 6.2% p.a., an extra $200 per month cuts the loan term to approximately 26 years and 8 months. An extra $500 per month cuts it to around 23 years, saving about 7 years of repayments.

Housing affordability

• % of income required to service a new mortgage: 45.0% 
• % of income spent on rent: 33.4%

Housing affordability remained stretched in 2025, as home values continued to rise faster than household incomes.

According to Cotality’s November 2025 housing affordability report, Australia’s median dwelling value rose 6.6% over the year to September 2025, reaching $860,529. Over the same period, gross median household income increased by 3.4%, from $101,000 to $104,390.

This pushed the national dwelling value-to-income ratio to 8.2, meaning the median dwelling was worth more than eight times gross annual household income. For houses, the ratio was higher again at 8.9.

Renters also faced pressure. Median rent rose 4.5% over the year to $671 per week, consuming around 33.4% of gross household income.

For buyers taking out a new mortgage, the affordability hurdle was even higher. Cotality estimated that servicing a new mortgage required around 45.0% of household income as of September 2025.

Affordability and serviceability pressures have remained a major constraint into 2026. Higher interest rates have reduced borrowing capacity and lifted repayment burdens, narrowing the pool of buyers, particularly at higher price points where borrowing limits are most binding.

Australia's household debt-to-income ratio

Australia’s household debt-to-income ratio sat at 177.7% in the March 2026 quarter, down from a peak of around 187% in 2018, according to ABS data.

Housing debt is the main driver. It was equal to 134.6% of annual household disposable income, meaning households owed about $1.35 in housing debt for every $1 of disposable income. This accounted for just over three-quarters of total household debt.

Housing availability

• National Housing Accord target: 1.2 million homes by mid-2029 
• Dwellings commenced in 12 months to March 2026: 197,341 
• Homes now needed per year to hit target: 255,300

The federal government has set a National Housing Accord target of 1.2 million new homes over five years to mid-2029, equal to an average of 240,000 homes a year.

Construction is already running below that pace. Based on seasonally adjusted ABS data, Australia commenced just over 197,000 new dwellings in the 12 months to March 2026. HIA has estimated the shortfall in the 2024-25 financial year alone was 60,960 homes.

Because the first full year of the Accord period fell short, the number of homes needed each year has increased. Master Builders Australia has calculated the country now needs to average 255,300 new homes a year over the remaining four years of the Accord to still reach the 1.2 million target.

A combination of factors is holding construction back. Labour shortages, high construction costs and planning delays continue to limit new supply, while longer build times mean approved projects are taking longer to reach the market.

At the current pace, Australia remains well short of the construction rate needed to meet the national housing target and the annual rate required to still meet the Accord target will keep rising.

Demand for rental properties

• National vacancy rate: 1.2%
• Rental properties available nationally: 37,844
• National combined asking rent: $700.04/week

Australia’s rental market remains severely undersupplied. SQM Research recorded a national vacancy rate of 1.2% in May 2026, with 37,844 residential properties available for rent across the country. All capital cities had vacancy rates below 2%, well under the 3% level considered a balanced market.

At the same time, national asking rents rose 7.8% over the year to May 2026, reaching a combined average of $700.04 per week.

Darwin had the tightest rental market, with a vacancy rate of just 0.3%, and the fastest annual increase, with asking rents up 14.0%. Sydney remains the most expensive, with combined asking rents of $919.65 per week.

First home buyers

• First home buyer owner-occupier loans: 30,241
• First-time investor loans: 1,786

There were 30,241 first home buyer owner-occupier loans in the March 2026 quarter,  ABS data shows. First home buyer owner-occupier loans rose 5.0% year-on-year, although they were down 4.3% compared with the December 2025 quarter.

Victoria recorded the most first home buyer owner-occupier loans, with 9,724 commitments, followed by New South Wales with 7,443 and Queensland with 5,673. The Northern Territory recorded the fewest, with 196 first home buyer loans.