Over 300,000 mortgage holders have virtually no equity in their homes

Peter Terlato 6 October 2016

mortgage equity calculcator home loan

Queenslanders are in the poorest equity position, while those in NSW are least in danger.

New research has revealed 311,000 Australian home loan customers have little or no real equity in their property, meaning the value of their home is only equal to or less than their outstanding mortgage repayments, putting them at risk if values drop or they are forced to sell.

Findings from the latest Roy Morgan Research State of the Nation-Spotlight on Finance Risk report found 6.8% of Aussies had little to no equity in their homes, with Western Australians (9.2% or 53,000) proportionately more vulnerable than mortgage holders in other states.

Queensland borrowers (7.5% or 68,000) were the next most likely to have a property valued at less or equal to what they owe, followed by South Australians (6.7% or 23,000) and Victorians (6.3% or 71,000).

NSW has the lowest proportion of mortgage holders with little or no equity in their home (5.1% or 73,000).

The latest Australian Bureau of Statistics (ABS) residential property price index found the mean price of residential dwellings in NSW ($799,500) remains the highest across Australia, followed by Victoria ($646,400) and the ACT ($622,900).

Despite Tasmania possessing the lowest mean house prices ($320,000), there are less (6.1% or 7,000) mortgage holders with little to no equity in their homes than in most other states.

Across Australia, average property values for mortgage holders with little or no equity in their homes were significantly lower ($478,000) than all mortgage holders ($674,000).

Mortgage holders have the opportunity to pay off their home loans faster, given rates are at an all-time low and housing affordability is the best it's been in years. You can easily compare providers in order to secure the best loan possible.

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