Experts have revealed first-home buyers now need an average deposit of more than $110,000, while monthly repayments have also skyrocketed during the past 12 months.
Comparison site Finder has crunched numbers released by the Australian Bureau of Statistics on home loans and found the average first-time homebuyer in Australia now needs $115,098 for a 20 per cent deposit.
This is because the average first-home loan has surged to $460,393 in Australia.
First-home buyers are borrowing $53,676 more on their maiden mortgages than they did last year.
The $460,393 figure is the highest average on record and 13.2 per cent higher than last year.
To put that in perspective, the average first-home loan only rose 1.5 per cent in the 12 months prior.
Concerningly, Finder’s home loan expert Richard Whitten said the average first-home loan would continue to climb.
“First-home buyers are forking out a record amount to secure their own property with no signs of slowing,” he said.
“The pandemic has fuelled a spike in housing market activity. And this, coupled with the First Home Loan Deposit scheme and New Home Guarantee, has led to record borrowing among first-home buyers.”
Mortgage repayments for those debuting in the property market have also soared during the past year.
The average first-home mortgage has jumped to $2179 a month.
It is a $254 monthly increase (or $3048) a year compared with the average first-home buyer loan taken out in July 2020.
First-home buyers collectively borrowed $6.04bn in July 2021.
Mr Whitten recommended first-home buyers should seek a fixed interest rate or certainty around their repayments.
He said first-home buyers, when thinking about taking on a mortgage, should also factor in higher rates in future.
“First-home buyers are particularly vulnerable to future rate rises, so lenders are careful with who they approve,” Mr Whitten said.
“If you put your current interest rate into a repayment calculator with your loan amount, you know how much you have to repay.
“Increase that rate from, say, 2 per cent to 2.8 per cent or even 3 per cent. Can you still afford the repayments now? Because that could be your interest rate in a year or two.”