When you’re a young Australian looking to utilise your first home loan to its fullest, it’s all about affordability. Considering the huge value gains that some cities in Australia have seen over the last year, you would be forgiven for thinking there aren’t any affordable places left in the country.

However, don’t let the news fool you: there are still some bargains to be found in Australia, and they might be closer than you think!

Affordability is actually pretty good at the moment.Affordability is actually pretty good at the moment.

What is affordability?

The thing that people tend to forget about housing affordability is that it isn’t just about how expensive the houses themselves are. That’s certainly an obvious factor, but perhaps even more important is the mortgage environment. You could have a home that’s worth $100,000, but if home loans are asking for a 20 per cent interest rate per year, that’s still pretty unaffordable!

So, with this in mind, you could be surprised to learn that affordability is, right now, the best it has been in three years. CoreLogic RP Data might be reporting Sydney is edging closer and closer to the one-million-dollar median mark, and Melbourne may be continuing its rapid rise upwards, but the Real Estate Institute of Australia and Adelaide Bank have released a report that demonstrates that affordability hasn’t quite gone to pot, as everyone seems to be saying.

Low interest rates, easy servicing

We are living in a period with one of the lowest home loan interest rates in history.

This report, which covers the March quarter of 2016, found that only 30 per cent of the median family income is now required to service the median home loan across Australia. That’s down from 32.4 per cent in the previous quarter, and down 0.8 per cent from this time last year.

In fact, affordability hasn’t been this good since 2013.

The reality is that we are living in a period with one of the lowest home loan interest rates in history. The official cash rate was dropped by the Reserve Bank of Australia earlier this year, with commercial lenders following suit. Combine that with the intense competition between lenders and you’ve soon got people rushing to make their loans the most appealing (and affordable) to you.

But all these great deals do come at a price: With so much capital flying left and right in the real estate market, it’s more important than ever to ensure you are getting the most suitable loan for your needs. This is why it’s so integral that you remember to head to a mortgage broker when you decide to take advantage of the current strong affordability. There are plenty of expensive properties out there, but with an easy-to-service mortgage, those homes can still be yours!

You can contact a Smartline Mortgage Adviser on 13 14 97 for mortgage advice. Or complete our call request form and we’ll call you!

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.