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In this discussion paper, the author estimates the total cost of a mortgage as a proportion of wages over the 30-year life of a standard home loan. To do this, he compares home prices, mortgage rates, and wage changes to see what proportion of a median income would go to covering the cost of the median mortgage.
The results reveal a significant increase in the lifetime expenditure on the median mortgage over three decades, and a consequent reduction in the spending capacity of average Australian households.