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.

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Marlon Baena
July 22, 2024
Karis dedication to assisting with our home loan, even while I was on holidays, truly exemplifies a commitment to excellent service. It's the small things that often make a big difference, and it seems Karis attention to detail and clear communication were key to our smooth home purchase. I highly recommend using UNO and Karis for your home loan needs.
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July 18, 2024
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July 18, 2024
Andrew Wyers and team have been amazing. Andrew is very knowledgeable, offers practical advice and he has been pivotal in helping me secure a mortgage at a very competitive interest rate. He was highly responsive to my queries and,being a new immigrant to Perth, he was very patient with my many many questions. An added benefit for me was his knowledge of how superannuation here works. A hec of a great guy to work with, reliable and he goes above and beyond. I would recommend highly recommended him, especially for new immigrants. In fact, I will be using him again very soon!
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July 2, 2024
Karis from UNO was so supportive throughout the entire process of buying our first home. She was contactable at any time, and answered all our silly questions for us. We couldn't recommend Karis and her team enough, as it always felt like she was in our corner with our best interests at heart.
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July 2, 2024
We dealt with Karis Churchill as the mortgage broker for our first home. Karis was so supportive and knowledgeable through the whole process! A+ mortgage broker. Definitely utilise her expertise if you’re buying a house!
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Kapil Baldota
June 25, 2024
Eren Tan is absolutely one of the best mortgage brokers in Melbourne! Keeping us well informed throughout the process. Eren gave us a helpful hand in managing to get our loan over the line in a quick and efficient way which is what we wanted and he delivered on that. Thank you Eren Tan!
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June 21, 2024
I only have praise from my Uno experience! I was a broker sceptic, having done all of the hard work myself for my first two property purchases and sale. I'm now a proud broker advocate having used UNO (Karis Churchill) for two refinances and purchase. The value add Karis brought cannot be underrated! Not only has Karis got me the best rate, with a bonus cash back (nearly unheard of in this climate), she has done it with the least back-a-forth and with the least administrative burden on me (the thing that can deters people from refinancing to begin with). Karis is always on top of everything. Karis knows her stuff. She is the most responsive of any professional service provider I've ever used (my banker never text with an update at 7pm on a Sunday) without being overbearing. You know she's got your back and in my experience the value speaks for itself. Thank you to the whole UNO team, thank you especially to Karis.
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Leanda Cawdry
June 8, 2024
Very pleased with the outcome of this process, Michael Parsons and his team at UNO were helpful, communicative, and took all the stress out of the process of finding me a refinance deal that met my needs. Would definitely recommend Michael and UNO, and I already have!
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Glen Matthews
May 29, 2024
Regarding UNO Home Loan services. I had great experience with uno home loans, Michael parsons was my broker for UNO Home Loans we had excellent communication throughout the whole home loan application. If I had any questions on home loan application which were many were answered in great detail. He had the time to assist me in filling out endless application forms at anytime through the day or night which made the application process stress free. So I would strongly recommend Michael parsons from UNO Home Loans to try his services you will not be disappointed. Thanks to Michael parsons I have the lowest home loan interest rate I could ever hope for which I particularly ask for. It’s was a pleasure working with him. And will be using his services in the near future.
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Gillian Anderson
May 28, 2024
Thank you to Michael and UNO for their help in securing our home loan. I like the way they break everything down in simple terms to ensure that you can make the right decision. Michael was polite and very patient to help us get things across the line. We are now sitting in our first home away from rental circus. Can't recommend them enough. Thanks Michael and thanks UNO
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Amy has been absolutely wonderful as a broker. I would not hesitate one bit in recommending her services.
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