The latest ING Direct Financial Wellbeing Index has found two in three households (65%) are ‘very comfortable’ with their long term debt - the highest level since tracking commenced.
Household comfort levels with long-term debt, like mortgages, have risen from a score of 5.67 (out of a possible 7) in Q1 to 5.73 in Q2. Furthermore, households are more comfortable about debt than any other aspect of financial wellbeing.
“There is no doubt low interest rates are impacting sentiment towards mortgages, “says Lisa Claes, executive director distribution at ING Direct.
“It’s also comforting to see 43% of households, nationally, are paying extra on their mortgage to get ahead.”
Around the states:
39% are paying extra in NSW&ACT
42% are paying extra in VIC
45% are paying extra in QLD
46% are paying extra in SA and 51% in WA
While debt is being prioritised, households are struggling with the higher cost of living, with 83% saying everyday costs have risen over the past year – by an average of $43 per week.
Roughly nine out of ten (91%) blame the burden on utility bills, followed by groceries (77%) and fuel (74%).
Household financial wellbeing declined slightly in Q2 with the Index score falling to 107.8 in Q2, down from 108.2 in Q2.
The proportion of mortgage free households in Australia is 28% and 36% own their home with a mortgage.