Australian household debt has steadily risen over the past three decades as more of us aim to own homes and continue to rely on products such as car loans and credit cards. As a result, Australia is reported to have some of the highest personal debt levels in the world.
The average Australian household had a debt of $261,492 as of December 2022, according to the most recent data form the Australian Bureau of Statistics (ABS). This is equivalent to a national total of $2.66 trillion in household debt, based on the number of households the ABS included in the data.
Value of personal debt in Australia
Mortgage debt typically makes up the biggest portion of average household debt in Australia. But personal loans, car loans, credit cards and student loans (e.g. HECS-HELP balances) also contribute to personal debt levels in Australia.
As the amount of debt each Australian has varies depending on the loans or products taken out in their name, these details can help put it in perspective:
35% of Australian households have a home loan
54% of Australians have a credit card, according to Finder research.
14% of Aussies have a personal loan
14% have a car loan
Source: ABS Housing Census Data, Finder Consumer Sentiment Tracker
Finder research has also found the average Australian has a total of $20,238 in personal debt (excluding mortgages and student debt) in 2023.
How does Australia’s household debt compare to other countries?
Australia has the third-highest level of household debt for countries in the Organisation for Economic Co-operation and Development (OECD), worth 211% of net disposable income per household.
Only Norway (247%) and Switzerland (223%) have higher levels of household debt, while the Netherlands is an equal third-place with Australia.
Finder survey: How would Australians choose to use $50,000?
Response
Put into a savings account
41.63%
Pay off home loan
25.3%
Put into a term deposit account
24.7%
Pay off debt (card, buy now pay later, personal loan)
17.73%
Spend it on a holiday
16.93%
Put into ETF/invest in the share market
16.63%
Home repairs/renovations
12.85%
Invest in property
10.16%
Other
4.38%
Source: Finder survey by Pure Profile of 1004 Australians, December 2023
The difference between “good” and “bad” debt
While Australia's $2.66 trillion of personal debt is among the highest of OECD countries, it is important to consider the different types of debt that contribute to this figure.
On a very basic level, these debts can be viewed as either “good” or “bad”.
Good debt has the potential to build wealth in the long-term. For example, a home loan allows you to work towards owning your own home, and an investment property loan allows you to earn income from renting a property or selling it at a profit.
Bad debt is high-risk and may reduce your wealth over time. It can also indicate you have paid for items or services you would not be able to afford based on your income. For example, credit card or personal loan debt that's not attached to an asset (such as a car).
It's also important to keep in mind that any debt can become a bad debt if people are unable to repay it.
For example, home loans make up the majority of Australia's household debt, which is typically considered "good debt". But Finder research found 40% of Australians struggled to meet repayments in 2023. This can indicate mortgage stress, and a risk of further issues.
So, as well as considering the types of personal debts Australians carry, it’s important to look at factors such as our income and interest rates.
Amy Bradney-George was the senior writer for credit cards at Finder, and editorial lead for Finder Green. She has over 16 years of editorial experience and has been featured in publications including ABC News, Money Magazine and The Sydney Morning Herald.
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