The four-bedroom house at 60 Homestead Drive, Lara, sold recently for $700,000.

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Geelong’s mortgage belt is widening as new data reveals the areas where people have the most still to pay on their home loans.

The Digital Finance Analytics data reveals people living in hot spots along the Surf Coast between Point Lonsdale and Lorne have the biggest average home loans to pay.

The figures show the average outstanding mortgage is $431,000 at Barwon Heads, $643,000 at Point Lonsdale and Queenscliff, and up to $735,000 at Lorne.

The areas not only have high property prices but saw a massive influx of buyers in recent years.

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RT Edgar Bellarine director Felix Hakins said towns such as Point Lonsdale and Ocean Grove were still experiencing an influx of people into high-end developments, such as The Point.

But the region’s true mortgage belt is the growth areas on Geelong’s urban fringe from Lara in the north to Leopold in the east.

Homeowners still owe $376,000 on average at Lara, and $318,000 at Leopold.

Borrowers at Highton and Armstrong Creek have between $266,000 and $286,000 on average to pay off.

Analysis comparing outstanding mortgages to median house prices recorded by PropTrack reveal residential development hot spots deserve their reputation as a mortgage belt.

Average outstanding mortgages in Point Lonsdale and Lara represented more than 50 per cent of the suburbs’ median house prices, with Leopold, Armstrong Creek and Torquay above 40 per cent of their suburbs’ median value.

The four-bedroom Point Lonsdale home at 36 Saltbush Circuit sold for $1.6m recently.

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Meanwhile homeowners in Newtown, Geelong’s most expensive suburb, shows $156,000 outstanding on an average mortgage, which represents 13 per cent of Newtown’s $1.2m median house price.

Homeowners owed the least in battler suburbs such as Newcomb ($93,000), and Corio ($82,000), which represented almost 17 per cent of the suburbs’ median house prices.

Loan Market mortgage broker Chris Appleford said the high figures at areas such as Lara reflected the people borrowing up to 95 per cent of their purchase price to buy.

“There’s a lot of land and construction opportunities out there but most of the loan applications are for pre-approval so they can go and look for homes and know exactly how much they’ve got to spend,” Mr Appleford said.

The three-bedroom house at 100 McClelland Ave, Lara, sold for $700,000 recently.

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“People have higher loan balances out there because of first-home buyers borrowing 95 per cent of the purchase price, and families who have not been able to buy in Melbourne coming down and borrowing 80 to 95 per cent to buy a property in Lara.

“It’s a good area for young families looking to get into the market.”

He said there’s no doubt borrowers were doing it tough contending with rising cost of living pressures and higher interest rates.

“I’ve got a couple of clients who are coming off four-year fixed rates of around about 2 per cent – which has been unbelievably good for them – but they’re going to see a significant increase in their repayments come December,” he said.

Loan Market mortgage broker Chris Appleford.

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Reports showing a small but rising share of borrowers falling behind on their loan repayments indicates most people had done a great job at managing their budgets, Mr Appleford said.

“It’s certainly been a very challenging time, but what was expected and what has happened has been completely different,” he said.

“Hopefully if the reports are to be believed that interest rates will start coming down next year, there will be some relief for those people as well.”
Digital Finance Analytics chief executive officer Martin North said the October data revealed many households were under “significant financial pressure”, spending more than 40 per cent of, and in some cases over half, their disposable income on rent or mortgage payments.

The four-bedroom house at 55 Village Green Drive, Leopold, sold recently for $670,000.

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“Younger families, especially first-time buyers, are under the most pressure, but it is spreading into more segments, and that does include some more affluent groups as well as older Australians,” Mr North said.

He said real income, adjusted for inflation, was lower than a decade ago for many families despite recent tax changes and increased government support.

AVERAGE OUTSTANDING MORTGAGES BY POSTCODE – Digital Finance Analytics