The Australian dream of home ownership carries a $1 million price tag for many, according to research by comparison website finder.com.au.
The research found that Australians with a mortgage of at least $489,300 will end up paying $1 million over the life of a 30-year loan using the average variable interest rate of approximately 5.5 per cent.
Furthermore, if the mortgage was 80 per cent of the property’s value, any property priced from $611,625 will end up costing the borrower $1 million.
Michelle Hutchison, spokesperson for finder.com.au, said borrowers face the danger of having to spend a lot more than necessary.
“When borrowers look at how much they can afford to repay for a home loan, they might not look down the track to how much they end up spending,” Ms Hutchison said.
“While it’s likely that your home will increase in value over a 30-year loan term, it might not compensate the cost of a home loan, as the money you end up spending can be greatly increased if you have a small deposit and don’t shop around for a good value deal.”