The coastal area with the lowest mortgage stress in Australia

• Fisherman Bay has the lowest mortgage stress in Australia
• The coastal city is just a two-hour drive from Adelaide.
• Perth inner suburb close to beach, affordable city too

A seaside city and an attractive inner-city riverside suburb have the lowest mortgage stress levels in Australia.

Australians who want to avoid the pain of rising interest rates don’t have to live too far from the ocean, with a seaside town a two-hour drive away, 180km northwest of Adelaide and a fancy part of Perth considered as easy places to pay a mortgage.

The PropTrack real estate data set has revealed the most affordable places for a working couple to buy a home or unit, if they both earn an area median income.

The South Australian town of Fisherman Bay, on the Yorke Peninsula overlooking Spencer Gulf, is so affordable that it’s possible to buy a three-bedroom house for less than $60,000 and be close to the water.

PropTrack economist Angus Moore said regional areas offered more options for those who wanted to buy a home.

“There are still some parts of Australia where mortgages are still quite affordable relative to average suburban incomes,” he said.

“These are mainly in regional areas, where prices are lower.”

A three-bedroom ‘family cabin’ near the beach sold in February for $52,250.

The median home price in Fisherman Bay was $60,000 in May, in the 5522 postcode, where $61,000 is the median dual income, a notch below Australia’s median salary of $65,000 for a person.

PropTrack calculated monthly mortgage payments of $270 consumed just 2.7 percent of income for buyers with a 20 percent mortgage deposit of just $12,000.

For those wanting to live close to the beach in a major city, luxurious Mosman Park in West Perth commands an affordable median price of $350,000 per apartment, a level well below the $2 million midpoint for houses.

The suburb of Swan River, which is adjacent to Cottesloe and home to millionaires, has a median household income of $170,200, in the 6012 ZIP code.

Monthly mortgage payments of $1,660 eat up just 5.9 percent of income for those buying a typical unit, with a 20 percent mortgage deposit of $70,000.

But it would still be affordable for someone with an average full-time salary of $94,000.

“Even in capital cities, there are some pockets where mortgage costs remain on the more affordable side relative to income,” Mr. Moore said.

These areas are sparing themselves of the mortgage stress phenomenon plaguing much of Australia after the Reserve Bank raised interest rates for the 12th time since May 2022 this month.

Last week, major banks raised their standard variable rates by 0.25 percentage point to account for the June RBA cash rate rising by 25 basis points to an 11-year high of 4.1 percent.

But Australia’s two biggest lenders, Commonwealth Bank and Westpac, on Friday sneakily raised their variable rates outside of an RBA move, hitting new customers living at home.

Westpac raised its variable rates by 15 basis points, raising its Flexi First Option Home Loan rate for a borrower with a 20 percent mortgage deposit to 6.09 percent.

The Commonwealth Bank raised its variable equivalent rate by 10 basis points, taking out a wealth package loan for new owner-occupier clients at 6.44 percent.

RateCity’s director of research, Sally Tindall, noted that major banks were no longer offering variable rates below six percent, just over a year after mortgage rates started at a “two.”

“If you’re in the market for a home loan, take the time to look beyond the big four to see what’s possible,” he said.

“A lower rate will help control your new mortgage payments, but it will also increase your borrowing capacity in what is an incredibly difficult market.”