How big is the home loan market in Australia?

The home loan market in Australia is a very big place designed to suit a range of needs and budgets, so it’s worthwhile comparing options from more than just your childhood bank.

Whether you’re applying for your first home loan or looking to purchase your third investment property, it’s important to compare your options for a mortgage across the market. So, how big is the home loan market in Australia, and how can home buyers best compare their options?

How big is the home loan market?

The home loan market in Australia is gigantic, with the latest figures from the Australian Bureau of Statistics (at the time of writing) showing that housing finance commitments for April 2022 alone amounting to over $31 billion.

Owner-occupier home loans make up the majority of the home loan market. The latest figures show that the value of these loans amounts to $19.9 billion, around 66% of the market for April 2022. Investors make up the remaining market share of home loans, with the total value of loans written at $11.1 billion.

And that’s just for one month’s worth of loan writing. For an example of how much value is in home loans for lenders, Australia’s biggest bank, Commonwealth Bank, revealed in its FY21 results that its home loan portfolio total balance amounted to $439 billion by June 2021 (excluding Bankwest figures).

Further, the latest Australian Bureau of Statistics census data, released in 2022 and recorded the previous year, shows that a third of all Australian households (35%) currently own their home with a mortgage. And in the last 25 years, this figure has doubled, indicating that we are a nation that loves its property.

It’s worth understanding the scope of the home loan market so you can understand the importance of comparing your options before you apply for a mortgage.

How many home loans are offered in Australia?

There are a range of home loan lenders in Australia that could offer eligible customers home loans to suit a wide variety of purposes and needs. From big banks that provide branches in rural areas, to online-only lenders offering innovative technology, there are lenders to suit every Australian. For a detailed look at how each home loan lender type differs, please read our guide.

And speaking of variety, there are home loans for first home buyers, home loans for investors, home loans for retirees earning a pension, home loans for self-employed Australians, and much more. Because of the sheer diversity in home loan needs, there is a wide variety of mortgages in the Australian market to compare.

What matters most is that you take the time to carefully consider your home loan goals and compare your options based on your specific financial needs. What suits one home loan customer will not necessarily suit you, and vice versa.

Your home loan goals may include:

• A low-rate home loan
• A low-fee home loan
• A home loan with flexible features
• A home loan that offers interest-only repayments
• A digital home loan for speedy application time
• A home loan with great face-to-face customer service
• A home loan with a short or long loan term

How to compare home loans in Australia

So, with such a wide scope of options in front of you, how can you best compare home loan options in the Australian market? Luckily, there are tools available that can help you narrow down your options and create a home loan short list.

Comparison table

A comparison table allows you to view different home loan options side by side so you may easily compare factors like interest rates, fees, features, and monthly repayment estimates. Simply enter your details, such as your loan amount and deposit size, and filter down your preferences based on your home loan goals, such as ordering via the lowest interest rate or only showing loans from the big four banks.

Repayment Calculator

RateCity’s Mortgage Repayment Calculator allows you to further whittle down your shortlist of home loan options you’ve created from the comparison table. You can enter the details of your home loan options into the calculator and discover how each home loan may suit your budget based on the repayments.

Real Time Ratings^TM

If you’re tossing up between two or three options, you may need a helping hand to discover your ideal home loan. This is where Real Time Ratings^TM comes in. Real Time Ratings^TM results show you a score out of five stars for each home loan, based on loan costs and flexibility.

RateCity’s rating system also factors in your loan size, deposit amount and borrowing type, so your results are actually relevant to your situation. And unlike other comparison websites that grade their products once or twice a year, the Real Time Ratings^TM scores are calculated live, making them as up-to-date as possible.

Compare home loans in Australia