Older Australians stuck in mortgage debt

by Julia Corderoy23 Jun 2016
The number of Australians aged 65 years or older still holding a mortgage rising by more than a quarter in the past three years, new research has revealed.

According to data from ING Direct, the number of over 65 year olds still holding a mortgage has risen by 28% over three years.

Of those in their retirement years that still have a mortgage, almost three quarters (74%) are still paying off an owner occupied mortgage while just over a quarter (26%) still hold an investor loan. The average debt they are holding is $158,000.

ING Direct head of third party distribution, Mark Woolnough, said this is not a surprising revelation.

“As property prices climb and people wait longer to get onto the property ladder, it’s not a surprise that people are holding their home loan debt later in life,” he said.

“However, proper planning is critical to make sure that this debt doesn’t cause stress in later years and people can enjoy the retirement they have worked hard for.”

According to ING Direct’s Autumn Buyers Guide, the average capital city residential property has increased in value by 32% since June 2012, with growth of 7.6% in the past 12 months alone. The average age of a home buyer has also risen in recent years to 38.

“We talk about superannuation and property as the barbells of a person’s financial lifecycle – in most cases they are the two biggest investments that a person will ever make,” Woolnough said.

He said brokers are in a prime position to educate and guide consumers about superannuation.

“Research has shown us that people are very open to discussing broader financial needs when they are sourcing a mortgage, such as their superannuation, and brokers are in a great position to encourage and support their clients to consider and sort their super in light of this growing property debt trend.”

In 2015, ING added the Living Super superannuation product to it Broker referral program.


  • by Really? 23/06/2016 9:02:48 AM

    You can't retire now until 70, so it is a result that was expected.

  • by SEQ Broker 23/06/2016 11:17:31 AM

    To be expected, however,

    $128k mortgage would translate into something like $650 per month if re-ammortised over a 30 year term. Given that this amount is less than half - more like a third of what they would pay for rental if they were forced to sell, surely there is a product out there to let them do this? The NCCP and responsible lending says no, they cant pay off their mortgage because they have no real income. (no sane person calls the pension an income!); So they are forced to sell, relinquishing the asset and now causing their residence to cost them three times the amount it could have been.

    To be fair, I don't have reverse mortgage qualifications and would pass this kind of business to someone who does. Perhaps one of those people can make a note on how its done and how it is NCCP Compliant to do co - if it can be done.

  • by Reverse Mortgage Finance Solutions 23/06/2016 2:43:51 PM

    Would be interested to see the basis of the data, including what the 28% represents in actual numbers, particularly with more people working past 65
    Those entering retirement are also considering lump sum drawdowns from super to pay out existing mortgages.
    Finally do these figures include reverse mortgage borrowers.