Average loan sizes have climbed almost 11% year-on-year as affordability pressures mount across Australia
Half of prospective buyers say rising interest rates have reduced their confidence to purchase property, up from 35% in the previous quarter, according to major broking franchise Mortgage Choice.
The firm's Home Loan Report for the March 2026 quarter draws on home loan submission data and a nationally representative survey of 1,000 consumers, conducted in March 2026 by Honeycomb Strategy.
The national average loan size rose by nearly $68,000 year-on-year over the March quarter, reaching $696,443 – an increase of 10.8%. The South Australia and the Northern Territory region recorded the highest annual growth of any region, with the average loan size climbing $105,117 to $694,633. Borrowers in Queensland and Western Australia also took out substantially larger loans, with average loan sizes increasing by more than $80,000 in both regions.
| Average loan size, by region | |||
| Region | Average value | Change | Annual growth |
|---|---|---|---|
| New South Wales / Australian Capital Territory | $767,910 | +$39,353 | 5.4% |
| Victoria / Tasmania | $674,193 | +$44,887 | 7.1% |
| Queensland | $671,620 | +$82,064 | 13.9% |
| South Australia / Northern Territory | $694,633 | +$105,117 | 17.8% |
| Western Australia | $640,375 | +$84,568 | 15.2% |
| National | $696,443 | +$67,759 | 10.8% |
| Source: Mortgage Choice | |||
"Consecutive rate hikes this year have shaken confidence, with 50% of prospective buyers saying that interest rates are making them feel less confident to buy – a significant jump from 35% the previous quarter," said Anthony Waldron (pictured right), chief executive of Mortgage Choice.
"With each new hike, buyers are having to reassess their property plans, and find new approaches to saving and planning. However, for those who are already in a position to purchase, the market conditions may work in their favour."
Spending cutbacks become more common
Four in five prospective buyers have reduced their spending to save for a deposit, a rise of 10 percentage points on the previous quarter. For existing borrowers, two in three have cut expenditure to meet mortgage repayments.
The most commonly cited reductions include eating out less (37%), cutting back on non-essential purchases (34%), reducing or cancelling entertainment expenses (34%), postponing or cancelling holidays (28%), reducing spending on groceries or household essentials (27%), and driving less to save on fuel (26%).
"Each quarter, we ask survey respondents what sacrifices they're making to save up a deposit or manage their mortgage repayments," Waldron said. "A year ago, the proportion of buyers and borrowers having to make sacrifices to save up their deposit or manage their mortgage was trending down. Now, sacrifices are trending up for both borrowers and hopeful buyers."
Parental assistance increasingly expected
Almost half of first-home buyer respondents (45%) expect to receive financial assistance from their parents to purchase property. The nature of that support varies, ranging from help with the deposit and purchase-related costs to acting as loan guarantors or co-purchasing alongside their children.
"The survey also shines a light on the changing expectations of first-home buyers," Waldron said. "Almost half of respondents (45%) expect to receive financial support from their parents to purchase property. This assistance will help first-home buyers in a range of ways – from helping them to buy at all, to enabling them to buy sooner or borrow less, and for some to help cover purchase costs.
"The survey also revealed a stark difference in expectations for how long it will take to save a deposit, with 36% of prospective buyers saying they expect it will take five or more years, and 31% expecting it will take less than two years. The gap reflects the reality that first-home buyers without the financial backing from their family face a fundamentally different journey to homeownership than those who can access parental support."
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