Melbourne postcodes with the biggest mortgage debt
Thousands of homeowners across Melbourne are carrying the weight of million-dollar mortgage debts. See where the biggest borrowers live and search your postcode.
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Thousands of homeowners across Melbourne are carrying the weight of million-dollar mortgage debts.
And with a potential 14th interest rate hike looming next Tuesday, a leading buyer’s agent reckons even wealthy buyers in one of the city’s blue-chip postcodes have stretched their repayments to the limit.
New data from research group Digital Finance Analytics (DFA) has revealed the Melbourne areas with the largest mortgage debts for owner-occupied homes, including 16 suburbs with an average home loan in excess of $1m.
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Those living in the city’s priciest suburb of Toorak are bearing an average loan size of $3,166,688, equating to an estimated weekly repayment of about $5000 on a typical $5m house.
Other well-heeled postcodes with seven-figure mortgages include Brighton, Canterbury, Hampton and even Park Orchards in the outer northeast.
Morrell & Koren buyer’s advocate David Morrell said homeowners in the bayside ‘burb of Brighton were starting to struggle with the fallout from interest rate hikes more than any other area at the market’s top end.
“Brighton has always been the newer money (buyers),” Mr Morrell said.
“They’ve got two kids at private schools and two car leases so when interest rates go up, their mortgage limit gets stretched because they’ve bought more than what they could afford.”
DFA figures show the suburb has an average mortgage debt of $1.962m, which would see the typical buyer spend about $3000 a week on their home loan.
Mortgage Choice Bayside broker Tim Leonard noted that a further interest rate rise next week would be “diabolical” after seeing a huge uptick in refinancing following the previous rate hike.
“I’ve been waiting for phone calls the past 12 months and I’ve only been getting them now since the last rate rise,” Mr Leonard said.
“People are more panicked … the cost of living is starting to bite, people are running out of cash and are getting a bit desperate to reset their loans.”
He added that a popular option recently was refinancing mortgages back to 30 years to relieve cash flow pressure.
“Off the back of Covid people in Bayside had savings and managed to get through,” the broker said.
“But they don’t really have cash buffers anymore to absorb any unexpected costs which is a problem.”
However DFA founding principal Martin North explained that large mortgages were a result of “ultra low” interest rates prior to the consecutive increases seen last year.
“Before that, lending standards were weak and we had various government schemes,” Mr North said.
“As a result, the debt to income ratio blew out. Now of course we have higher rates and more households are under pressure.”
He added that a spate of “equity mate” loans as people refinanced to pay for holidays, renovations and helping their children buy property was also a contributing factor.
“Debt has never been so high,” Mr North said.
The research firm also revealed the postcodes where first-home buyers are splashing the most on mortgage repayments.
In the inner southeast, first-timers are paying off the biggest home loans in Elwood, where the average first-home buyer mortgage is an eye-watering $1,276,500 or $2000 in weekly repayments.
Buyer’s advocate Nicole Jacobs said the average purchasing price for first-home buyers was getting “greater and greater” as the typical age of first-timers also increased.
“More first-home buyers are couples who are a little bit older and are a bit more established in their job and are pooling their salaries together to get more borrowing capacity,” Ms Jacobs said.
Coburg, Hampton and Malvern East were other suburbs with exorbitant newcomer loans of$950,000, $878,000 and $873,000, respectively.
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