Average Home Loan Surges Over $105,000 in NT and SA — What Rising Borrowing Costs Mean for Buyers

Average home loan sizes in the Northern Territory and South Australia have surged by more than $105,000, according to the latest industry data — a stark illustration of how higher interest rates are forcing Australian borrowers to take on more debt just to participate in the property market.

The Numbers: What's Driving the Surge

The jump in average loan sizes across NT and SA reflects a compounding dynamic: property prices in these markets have risen faster than borrower incomes, while the RBA's rate hikes — including the most recent increase to 4.35% on 5 May 2026 — have simultaneously increased the total cost of servicing debt.

Borrowers are stretching further to purchase comparable homes, or taking on additional debt to cover higher purchase prices. On a $750,000 loan, the repayment difference between the 2021 rate lows and today's 4.35% cash rate equates to approximately $1,500 per month — a significant addition to household budgets already under pressure from inflation running at 4.6% annually (ABS, March 2026).

The Self-Employed Borrower Squeeze

Rising loan sizes create a particularly acute challenge for self-employed borrowers. As loan amounts increase, lenders apply more rigorous income verification — and the gap between what self-employed borrowers can demonstrate via tax returns versus what non-bank lenders can assess via Alt Doc methods widens.

For a self-employed borrower in South Australia seeking a $700,000 home loan, a major bank may assess borrowing capacity using the last two years' tax returns. If those returns show reduced income due to business write-offs, depreciation or restructuring, the bank may decline — even if business cash flows are healthy.

MPFG Capital's Alt Doc loan allows the same borrower to demonstrate income via 12 months of BAS statements or business bank statements, potentially unlocking the full loan amount required.

How Non-Bank Lenders Can Help in High-Cost Markets

As average loan sizes grow across regional and state markets, non-bank lenders are playing an increasingly important role for borrowers who fall outside the increasingly tight parameters of major bank lending.

Key advantages non-bank lenders offer in high-cost loan environments:

• Alt Doc income assessment: allows self-employed borrowers to qualify based on BAS statements or accountant letters
• Flexible LVR options: MPFG Capital offers up to 80% LVR for self-employed borrowers
• Interest-only periods: reduce monthly repayment pressure during the initial loan term
• Faster credit decisions: critical in competitive markets where delays cost deals

A Note on Loan Serviceability

With the RBA's cash rate at 4.35%, lenders are still required to apply a 3% serviceability buffer under APRA guidelines — meaning your loan must be assessed as serviceable at a notional rate above 7%. This buffer is calculated on the loan amount requested, so as average loan sizes increase, borrowers must demonstrate proportionally higher income.

For borrowers with variable or complex income structures, this makes Alt Doc and non-standard lending pathways more critical than ever.

MPFG Capital: Built for Today's Lending Environment

Our products are designed for the borrowers who are squeezed out by major bank criteria — not because they can't afford the loan, but because their income documentation doesn't fit the standard template.

Contact MPFG Capital on 03 9696 8888 or email finance@mpfg.com.au to discuss your specific situation with one of our experienced credit specialists.

This article is general in nature and does not constitute financial advice. Lending criteria apply. Past market conditions do not guarantee future outcomes.