Melbourne postcodes with highest and lowest mortgages revealed | Digital Finance Analytics

Surprise figures show one of the city’s priciest neighbourhoods has the lowest average mortgage, but owners in battler ‘burbs are more likely to pay them. See best and worst performing suburbs.

Nathan Mawby

@mrmawby

3 min read

November 2, 2024 - 5:01AM

Despite Melton’s median house price being close to the $510,000, 6 Sirdar St recently sold for — the average mortgage in the suburb is just $55,694 — hinting locals are more likely to pay down their mortgage than many wealthier areas.

Melbourne’s battler suburbs are more likely to pay down their mortgages than homeowners in some of the city’s wealthiest enclaves.

Surprise new home loan data shows that in affordable hubs from Melton to Frankston — the average loan still to be paid off is less than one-fifth of the suburb’s median house price.

But in million-dollar postcodes from Toorak to Beaumaris, the typical mortgage is anywhere from just under half what you’d pay for a house there to more than 75 per cent.

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Portsea was the only major exception, with homeowners owing just $32,000 on average – less than the price of a new car and only 1 per cent of the coastal suburb’s $3.075m median house price.

Data from Digital Finance Analytics shows the coastal holiday-home hamlet hosts Melbourne’s smallest average mortgage, followed by Melton at $55,694, Frankston North at $64,444, and Kinglake, $75,000.

Doveton and Melton South were the city’s only other suburbs where most owners owe less than six figures.

But the 10 areas with the lowest average mortgages all owe less than a fifth of what their home is worth.

Portsea is home to Melbourne’s smallest mortgages, despite sale prices for homes like 358 Hotham Rd this year topping $2m.

Toorak and Brighton top the list for the biggest amounts still owing on homes at $2.37m and $2.153m respectively.

Repayments on that much debt at today’s 6.12 per cent standard variable rate would top $15,000 a month and $180,000 a year.

There were 20 Melbourne suburbs with an average mortgage above $1m, and 59 areas across Victoria where the typical loan was higher than the state’s $604,839 average, according to Australian Bureau of Statistics figures.

DFA chief executive Martin North said separate data revealed many households were under “significant financial pressure”, spending more than 40 per cent of their disposable income on mortgage payments.

“Younger families, especially first-time buyers, are under the most pressure, but it is spreading into more segments, and that does include some more affluent groups as well as older Australians,” Mr North said.

126 Monterey Blvd, Frankston North, recently sold for $626,000 — but most of the suburb’s homeowners have paid down their mortgages substantially.

He said real income, adjusted for inflation, was lower than a decade ago for many families despite recent tax changes and increased government support.

Smart Lending director Melissa Gielnik said she wasn’t surprised to see figures suggesting homeowners in affordable postcodes were doing better with their mortgages than more affluent areas.

“When we had the global financial crisis, one of the highest repossession areas was Kew, while Melton had one of the lowest delinquency rates,” Ms Gielnik said.

“People with limited incomes budget better, and they don’t keep up with the Joneses. They will pay their mortgage before they eat.”

The home finance expert said property owners in more affluent areas were also more likely to be spending on pricier clothes and goods, taking on extra loans for expensive cars, or considering investing in shares – and less likely to prioritise paying off their mortgage.

With a $4.15m sale in July 15 Huntingfield Rd is the kind of residence where other lifestyle cars such as a high-end car could easily be expected of the owner.

“Sometimes people living in higher demand areas, they feel they have to live to a certain standard,” Ms Gielnik said.

Melton-area Mortgage Choice broker Robert Causovski said he believed small loan totals in affordable pockets like Melton could also be low as a result of older mortgages that were close to being paid off by people who had owned their home for decades.

Mr Causovski said that many more recent buyers, especially those who had bought at the peak of the market just before interest rate rises, were now looking at forgoing holidays to keep up.