Australian homebuyers are increasingly likely to carry sizeable mortgage debts into their 50s and 60s, challenging long‑held assumptions about owning a home outright by retirement.
New modelling from The Mortgage Coach suggests many borrowers are on track to reach their mid‑50s still owing hundreds of thousands of dollars, even when they start with a typical 30‑year mortgage and make minimum repayments, news.com.au reported.
On today’s average owner‑occupier variable rate of 6.19%, a couple who borrows $800,000 at age 38 would still owe about $500,000 at 55 – barely a decade before many hope to wind back work.
Co‑founder and CEO Bella Maxwell says the traditional narrative of buying young, paying off the home, and enjoying a debt‑free retirement is “rapidly unravelling”.
“The question is no longer just how Australians get into the property market,” Bella said. “It’s how they eventually get out of mortgage debt with enough time left to enjoy the retirement they worked for.”
The Mortgage Coach notes that in the mid‑1990s the average new home loan was about $97,000. Today, the figure is closer to $736,000 – more than seven times higher in a single generation – with new mortgages in Sydney often exceeding $1 million.
At the same time, first‑home buyers are entering the market 10 to 15 years later than their parents. These two shifts mean a 30‑year mortgage taken out in the late 30s can routinely stretch into the mid‑60s, even if there are no major setbacks.
John Maxwell, co‑founder of The Mortgage Coach, said many people misunderstand how slowly principal falls in the early years of a large loan.
“Most Australians assume their mortgage steadily shrinks every year,” John said. “In reality, the first decade often barely reduces the principal at all, which is why many homeowners are shocked when they check their balance years later.”
Refinancing can ease repayments but often resets the timeline, extending the loan horizon further into retirement. Over a working lifetime, some households may spend 40 years believing they are making progress while the end date keeps drifting away.
The Maxwells argue that many borrowers know their rough loan balance but not whether their mortgage is reducing at the pace required to be debt‑free before retirement.
A common mindset – that incomes will rise, repayments will eventually bite, and the system is designed to help them succeed – worked when loans were much smaller but is less reliable when the first decade barely touches principal.
In response, specialist firms such as The Mortgage Coach are promoting ongoing, professional home‑loan management that mirrors how high‑net‑worth households approach debt.
“Most households don’t have the time or expertise to monitor a mortgage the way it needs to be monitored,” Bella said. “Between careers, children, and daily pressures, people are doing everything they can. When someone professional watches it the way the wealthy watch their money, the outcome changes dramatically.”
For mortgage brokers, the message is that advice around repayment strategy, term, and refinancing decisions is becoming as critical to clients’ long‑term financial health as the initial mortgage rate they secure.
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