Mortgage debt surging among older Australians

Most Australians think they’ll own their homes outright by the time they retire, but a new report details how mortgage debt among older Australians blew out by 600% between 1987 and 2015.

Most people plan to own their homes outright by the time they retire, but a recent report shows many older Australians aren’t in fact living the dream, finding themselves knee- deep in mortgage debt in their sixties and seventies.

The amount of mortgage debt held by Australians aged 55 and over blew out by 600 per cent between 1987 and 2015, while house prices tripled, according to the Australian Housing and Urban Research Institute’s (AHURI) latest report, Mortgage stress and precarious home ownership: Implications for older Australians.

AHURI warns this growing social and economic problem creates a huge risk that people who cannot keep up with their home loan repayments will be forced out of ownership and into the private rental market later in life. Alternatively, in a bid to stay in their homes, they may look to their super balance to pay their mortgage, digging into much needed funds to support retirement.

Australia’s policy settings for retirement income assume most will own their home outright by the time they retire, said one of the report’s authors, Professor Ong, who added that is no longer the case.

What can be done?

UNO’s Household Financial Waste Report found one of the biggest hidden drivers of household financial waste in Australia is home loan interest, on which Australians are wasting an estimated $4.2 billion each year.

CommBank’s Connected Future Report, released a few years ago, found that first home buyers generally enter the market at 32 years of age – a figure that has remained unchanged for 20 years. UNO’s own data reveals that the average age of customers who refinance is 46. That’s a gap of 14 years between buying a home and refinancing it – and 14 years of potential lost savings.

“It’s important to check your loan every few years in order to make sure it’s still the best one out there for your circumstances,” said UNO chief executive, Anthony Justice, adding the sooner people can pay off their loans, the less likely they’ll find themselves with a mortgage in retirement years.

“Rising or falling best home loan rates, changing property values and new products entering the market can all impact how well a loan is performing. Many Aussies are simply turning a blind eye and paying more interest than they need to be,” Mr Justice said.

The importance of checking your rate

While people refinance for different reasons, one reason is to get a better rate which in turn means paying less interest over the life of the loan. As an active home loan manager, UNO can keep an eye on the market for you and let you know when it’s time to consider refinancing.

UNOs’ loanScore technology analyses the market daily to check customers’ loans against thousands of home loan products. UNO then alerts customers when their potential savings hit their chosen threshold and, with their approval, can renegotiate with the customer’s current lender or switch them to a better deal.

UNO loanScore customers who’ve already used the service, are getting a median 1 year savings calculated at $2,000, and a median 3 year savings calculated at $5,200. UNO data shows while 32% of customers could save by staying with their current lender, 95% of customers could save by switching to a different one.

UNO customer Amy recently saved $45,000 over the life of her loan, by switching to a better rate with one of the lenders on uno’s panel.

“By letting us keep an eye on your rate – and letting you know when you could switch to a better one – Australians could save thousands each year,” said Mr Justice.

At UNO, we’re excited about the possibility of fighting home loan waste. We believe in giving the consumer the power, so they have the option to pay the least interest possible over the life of their loan so they can enjoy their hard-earned income to the maximum.

Put your loan to the test



Book Call Now

UNO home loans

Need help with your home loan?

UNO Brokers are available night and day for a quick review or your situation and bring expertise that will support better decision making that will save you time and money. Book in a quick call when it suits your busy schedule

Get Started

Related Articles

TESTIMONIALS

What our customers are saying

Mike Vincent
April 10, 2024
Andrew is the best broker I have worked with and one of the few people who understands the investment journey from both a personal and professional standpoint. Andrew is an asset to anyone from a first home buyer to a seasoned investor.
Read more
Yu Su
April 9, 2024
Amy was very help and quick respond when I have questions. Really recommended.
Read more
John Cahill
March 7, 2024
Scott Wilkinson was my broker last year when I sought finance for a new property investment and refinance for my property port folio. He was an absolute delight to work with. He was always professional, on time and always available to talk at a moment's notice to discuss my credit options and give well considered advice; usually this was very much after-hours due to my work commitments during the day. He was always happy to talk. I had not used a mortgage broker in a long time opting to do the re-financing myself. This was primarily due to disappointing experiences I'd had with mortgage brokers in the past. However with the increasing complex nature of dealing with credit providers, I could see that I needed a good advocate to act on my behalf for this particular refinance. In all honesty I did not hold much hope that in the current credit environment I would be able to secure the finance I required for the new property investment I was wishing to secure. Scott found a way however and was able to secure the finance along with the refinance of my portfolio. I have since referred friends to Scott and I know they have been very happy with his work. He is ideal for property investors who have busy day-jobs and need someone who understands property investment strategy and is able to tailor credit advice and options to their needs. Scott provides this advice and information in a way that is clear and concise. He kept me up to date continually during the application process. He made what could have been a very stressful and frustrating process easy and straightforward. I could not recommend Scott and the team at UNO Home Loans more highly. They are all a delight.
Read more
Sally Mackenzie
February 19, 2024
We chose Uno Home Loans from their impressive web site knowing we were going to find it hard, on many fronts, to qualify for a home loan. We were incredibly fortunate to be assigned Mike Parsons as right from the get-go, despite the complexities, he hit the ground running for us. He was incredibly knowledgeable, with years of experience but what was immediately apparent and impressive was that he was totally invested in getting us over the line, doing absolutely everything possible, including working around the clock. Despite it being a relatively small loan in the order of things, Mike never missed a beat, getting docs ready, following up and answering every request from the proposed funder immediately. He kept us informed on progress the minute anything happened, and again if anything needed to be done, he was right on it. In short, we highly recommend Uno, and Mike, knowing what a remarkable job he did, over many weeks, to get us our loan. He got us a great deal, with far better rates than we expected, so we couldn't be happier. In fact, without doubt, you'd be hard pressed to find a more personable, sharp, hard working, dedicated professional who clearly prides himself on getting his customers standout results.
Read more
Rod
February 13, 2024
Scott and his team were just A-mazing. We felt supported through the whole process with the greatest quality and care. Every question answered right in time, or even before we asked. The process was smooth and we got the best outcomes we could have wished for.
Read more
Angela Biddle
February 6, 2024
Our mortgage recently came up for renewal, and with interest rates skyrocketing we were looking for ways to minimise the impact. Michael and his team were proactive and attentive. Michael spent time with us to understand our circumstances. He found mortgage options that worked with our current financial situation and longer investment plans. He presented clear options, providing guidance where needed. He and his team were helpful and responsive - streamlining the process and keeping us updated through the negotiations. In the end, Uno did the heavy lifting and secured a significantly better rate than our current bank offered, all with friendly, personal service. We would highly recommend UNO Home Loans.
Read more
Fotis Bikas
January 15, 2024
I cannot help but congratulate Scott Wilkinson of UNO Home Loans for being an absolute credit to both his company and the entire loans industry. Scott is a truly rare gem of a broker in that he will not only go the extra mile to achieve for each customer the very best deal, but his knowledge of all and sundry within the industry is unsurpassed (you will see what I mean if you speak to him). Additionally, Scott has a clear passion for imparting his wealth of information with each customer, whereas the conversation with most other brokers would simply be over if they could not get you the best deal. For me, Scott Wilkinson of UNO Home Loans stands head and shoulders above the competition and I feel privileged to benefit both from his expertise and professionalism whenever it is time for a refinance or new loan.
Read more
Tomoharu Matsui
January 11, 2024
Michael Parsons helped me a lot when it's difficult to establish my capabilities in loan.
Read more
Gillian Kearon
January 9, 2024
I highly recommend Mike Parsons as a mortgage broker. I couldn't fault the service provided by UNO. Thanks Mike!
Read more
Taner T
December 20, 2023
Thank you Eren Tan for the amazing service and support. Our Loan was a little tricky and complex for other lenders but Eren managed to get it over the line in record time. His professionalism and dedication to our needs was exceptional. If you need a Loan no matter how complex your situation, make sure you contact Eren at UNO Home Loans.
Read more
Karaipu Brown
December 20, 2023
Buying & selling a house at the same time is very stressful but Scott Wilkinson from UNO home loans made sure we knew what was happening & took most of the stress away. He always kept us up to date and if we had a concern or wanted clarification on something we were able to call him, if he didn’t know the answer straight away he will find out and contact us back.. now we are enjoying our new house and turning it into a home :)
Read more
Chris Anderson
December 18, 2023
Just completed my first loan with UNO which was so much easier than with other other brokers I have used in the past. Our broker MIKE PARSONS always had time for me and broke things down for me in the simplest of terms and was very patient with my silly questions and my constant changing of plans. I wish I had used them in the past as I wouldn't be in the situation I'm in now. Can't recommend them highly enough. Thanks UNO and Thanks MIKE 😊
Read more