Australian mortgage holders need to work for at least 18 days in order to meet their monthly loan repayment, a research by Canstar revealed. On average, homeowners repay $584,836 for their home loans. With the average monthly loan repayment being $3,883, they need to work up to at least 135 hours or 18 days every month.
“Borrowers paying off an average-sized loan on their own need to work about 135 hours or close to a full month to cover their mortgage repayments each month. That means 82% of their monthly working hours go towards their mortgage, which doesn’t leave much for other household bills and expenses,” said Effie Zahos (pictured), Canstar’s editor-at-large.
Single-income households spend an average of $659 for groceries every month, which amounts to at least three days’ worth of wages, while the $162 average for a monthly electric bill would take almost six hours of work. Other household essentials like the average monthly home and contents insurance premium worth $187 would take almost an entire day’s worth of wage.
“Simply putting food on the table is a big pressure point for households with the cost of food and
non-alcoholic beverages increasing by 7.9% over the 12 months to May, according to the latest monthly Consumer Price Index indicator,” Zahos said. “Throw in electricity bills, home and contents insurance and car insurance, and for someone on a single income there clearly isn’t enough working hours in the day to pay for their household bills.”.
When it comes to households that have two sources of income, the burden of paying off the monthly expenses can be reduced by half. Instead of the 18 days it takes to pay off the average monthly loan repayment, dual income households only need roughly two working weeks. For their average monthly grocery expense, they would only need one-and-a-half days of work per person, while their monthly electricity bill would only take almost three hours of work per person to pay off. Other household necessities such as monthly home and contents insurance as well as car insurance would only be around a total of six hours’ worth of wages.
“It goes to show that it’s near impossible to service the average-sized loan in today’s climate with only one income. The burden is lighter for households with two incomes with each person required to work close to 68 hours,” Zahos said.
“Time is our most valuable asset and, unfortunately, the cost-of-living crisis is forcing households to spend most of their working hours on bills rather than investing it into things that make them happy.”