An impressive 93% of Australian home owners say they are ‘comfortable’ with their mortgage, according to the ING DIRECT Financial Wellbeing Index, suggesting that household efforts to reduce debts are paying off.
In the first quarter of 2013, 44% of borrowers were ahead with their loan and comfort with long-term debt is now the strongest rating across all six financial indicators, with a score of 5.7 out of a possible seven.
ING DIRECT executive director of delivery, Lisa Claes, says Australians are taking advantage of low interest rates, using them to pay down their mortgage.
“Not only are households getting on top of their mortgage, but they are building strong cash savings and not letting mortgage repayments rule their balance sheets,” says Claes.
The index also shows Australian households have median savings of $15,427 - the highest since tracking began in the first quarter of 2010.
Among households with a mortgage, nearly half (44%) are paying down ahead of time (down from 49% in Q4), 50% are paying as due and 5% are falling behind.
Other findings for Q1 (surveyed in April 2013) show:
65% are ‘very’ comfortable with their mortgage
The proportion of mortgage-free households in Australia is 29%; 37% own their home with a mortgage; 31% are renting
The quarterly Financial Wellbeing Index rates household comfort levels across six key aspects of personal financial wellbeing, including credit card and mortgage debt, savings, investments, household income and ability to pay bills.