What Is the Average Home Loan Size in Victoria?

Victoria’s Average Home Loan Sits Below the Australian Average

Victoria’s average home loan of about $664,000 was below the Australian average of about $731,000 for new owner occupier home loans in the June quarter of 2026. Average loan sizes varied between states, reflecting differences in home prices, buyer activity, deposits and the types of properties being financed. Average Australian mortgage statistics may help put Victoria into context, but these figures relate to new loan commitments rather than every existing mortgage. They also do not mean that the average borrower in Victoria currently owes $664,000.

These differences may partly reflect higher property prices in some areas. An average mortgage in Melbourne may also differ from lending in regional Victoria because property values, deposits and the mix of homes being purchased may vary.

The Average Home Loan Figure Measures New Lending Activity

The average home loan figure is calculated from new owner occupier loan commitments during the relevant period. It includes loans used to buy or build owner occupied homes but does not represent every home loan already being repaid across Victoria. This distinction matters because lending indicators may change as the mix of new buyers changes. A quarter with higher-value property purchases might lift the average loan size even if many other buyers continue to borrow much less.

Average Loan Sizes Have Increased Over the Past Decade

Victoria’s average new home loan has increased substantially compared with a decade ago. The average owner occupier loan was around $416,000 in the June quarter of 2016, compared with around $664,000 in the June quarter of 2026. The movement has not been steady every quarter. Victoria’s average loan was around $639,000 in the same quarter of the previous year, while figures through late 2025 and early 2026 moved higher before easing in the latest June quarter. Changes between the previous quarter, last quarter and previous year may show past lending trends, but they do not predict what loan sizes or property prices will do next.

Several Factors May Influence the Average Loan Amount

The average loan amount may move for several reasons, including:

• changes in house and unit prices

• the size of deposits contributed by home buyers

• the balance between metropolitan and regional purchases

• changes in household income and expenses

• interest rate movements and lender assessment requirements

For example, if a larger share of new loans relates to higher-priced Melbourne property, the statewide average may rise. If more lending occurs in areas with lower home prices, the average might move in the other direction.

Borrowing Capacity May Differ from the Victorian Average

An average mortgage is not a target and does not indicate how much a lender may be prepared to provide to a particular borrower. Home loan applications are assessed using the borrower’s financial situation, proposed loan amount, income, regular expenses, existing debts and other commitments. Lenders also consider whether repayments might remain manageable if interest rates were higher than the rate applying when the loan begins. This means someone who may meet the initial monthly repayments on a particular home loan may still be assessed using higher repayment figures.

Lenders Consider More Than Income Alone

Common factors lenders may consider include:

• Income: The amount and type of income available to meet repayments.

• Living costs: Regular household costs such as food, utilities, transport and childcare.

• Existing debts: Car loans, personal loans and other property debt may affect borrowing capacity.

• Credit limits: Available credit may be included in a lender’s assessment.

• Deposit and loan term: These may affect the amount borrowed and expected repayments.

Because lenders do not all assess applications in exactly the same way, the maximum loan offered by one lender may differ from another. A maximum borrowing figure also does not necessarily mean borrowing that amount will fit comfortably within a household budget.

Deposit Size Has a Direct Effect on Home Loan Size

A home buyer’s deposit has a direct relationship with the home loan size needed to complete a purchase. If two people buy properties for the same price but contribute different deposits, the buyer with the smaller deposit will generally need a larger loan. For example, someone buying a $750,000 house and contributing $150,000 towards the purchase price would need to finance about $600,000 before allowing for other costs. Someone buying the same property with $75,000 towards the purchase price would need a larger loan amount.

Deposit Size May Affect Available Loan Options

The deposit affects the percentage of the property’s value that needs to be financed. Lenders consider this when assessing the loan, and a smaller deposit may affect available products, pricing or whether lenders mortgage insurance applies. A first home buyer may also need to allow for purchase costs alongside the house deposit. This means the money held in a savings account is not always the same as the amount available to contribute directly towards the property price.

Some home buyers may be eligible for government programs that might allow a purchase with a smaller deposit, depending on their circumstances and current government rules. These programs have eligibility requirements and do not remove the need for the lender to assess whether the applicant may repay the proposed home loan.

Monthly Repayments Matter More Than Matching the Average

For many borrowers, understanding likely mortgage repayments may provide more useful context than trying to match the average home loan. Monthly repayments depend on the loan amount, interest rate, loan term and repayment type. An average monthly repayment Australia-wide may provide broad context, but it may not be useful for personal budgeting unless the underlying loan size, interest rate and term are similar. One general approach is to compare repayments across several realistic loan amounts and rates.

Loan Size May Change Repayments Significantly

Consider a buyer comparing a $500,000 home loan with a $650,000 or $700,000 loan. Even where the interest rate and loan term are the same, the larger loan will require higher repayments and will generally result in more interest being paid over the life of the loan. Home buyers may consider factors such as:

• expected monthly repayments

• regular household expenses

• other loan and credit commitments

• how much money remains after repayments

• whether the budget might handle higher interest costs

The purpose is not to predict exactly what a lender will approve. It is to understand how different loan sizes may affect the household budget before making a lending application.

Interest Rates May Change the Cost of the Same Loan

The interest rate has a direct effect on home loan repayments. If the rate rises, repayments on many variable-rate loans may also rise, while fixed-rate borrowers generally retain the agreed rate until the fixed period ends. Australia’s cash rate, set by the Reserve Bank, may influence funding costs and home loan interest rates, but lenders set their own lending rates. A cash rate change therefore does not necessarily result in every home loan interest rate moving by exactly the same amount.

Rate Rises May Affect Repayments and Borrowing Capacity

Interest rate rises may affect existing mortgage repayments and the way lenders assess new loans. Higher assessed repayments may reduce the loan amount a lender considers manageable for some applicants, depending on their financial situation. Borrowers comparing loans may also look beyond the advertised interest rate. A comparison rate includes the interest rate and certain fees based on a standard loan example, although it may not reflect the actual cost for every borrower. There is also no single average interest rate that applies to every Australian mortgage. Rates may vary by lender, loan type, deposit size, property purpose and borrower circumstances.

First Home Buyers May Have Different Borrowing Considerations

First home buyers often compare their proposed home loan with the average home loan size because they want to understand what other Australians are borrowing. The comparison may be useful, but a first home buyer loan is better considered alongside the buyer’s deposit, income, expenses and preferred property price. First home buyer activity can also affect the total value and number of home buyer loan commitments recorded from quarter to quarter. However, an increase in new loans does not necessarily mean an individual buyer will find it easier to borrow.

Government Support May Change Deposit Requirements

Some first-time buyers may be eligible for government support that might reduce the deposit required for certain purchases, depending on their circumstances and current government rules. Eligibility and conditions depend on the scheme and may include requirements relating to the buyer, property and loan. A smaller required deposit does not automatically increase borrowing capacity. A lender still assesses whether the applicant may meet mortgage repayments and its other lending requirements. Buyers considering government assistance may check current official program conditions, as eligibility rules, property limits and other requirements may change.

Loan Structure May Affect Day-To-Day Repayments

Some borrowers may consider an offset account because money held in the account may reduce the balance used to calculate interest. Others might consider a more basic loan without additional features or account costs. The usefulness of each feature depends on the borrower’s circumstances and how they expect to manage the loan. Features are not automatically beneficial simply because they are included with a home loan.

A Broker May Help Put the Statistics into Context

Australian Bureau of Statistics lending indicators may explain what is happening across the wider market, but they cannot tell an individual borrower which loan amount or loan type may fit their circumstances. A mortgage broker may provide credit assistance by considering a client’s proposed purchase, deposit, income, expenses and other relevant details. A broker may also explain how different lenders assess borrowing capacity, compare repayments across loan options and discuss features that might be relevant after considering a client’s circumstances. Mortgage brokers providing credit assistance must act in their clients’ best interests, although the lender makes the final decision on whether a loan application is approved.

Understanding the Average Is a Useful Starting Point

People considering buying a house, refinancing a mortgage or comparing home loan options may seek general information from Eurobodalla Finance about how different lenders may assess loan applications and how loan structures may differ for different borrowing needs. Approval, rates, loan amounts and product availability remain subject to lender assessment and eligibility. This article is general information only and does not take into account your objectives, financial situation or needs. It is not personal advice. It is not financial, tax, legal or investment advice.