PLAN / WEALTH BEING
TAKE THE PRESSURE DOWN With mortgage stress rising to 15-year highs, DARE experts shine a light on ways to ease the repayment pain. Words SUE WILLIAMS M ortgage stress has risen to its highest level since August 2008, with older mental health of older Australians and increasing levels of distress, with the effect greater on females than males. The size of that increase just blew me away.” Online finance broker Savvy
Australians being increasingly impacted and their mental health suffering as a result. Roy Morgan research released in June finds that nearly 28% of all mortgage-holders are now classified as ‘at risk’ – when their mortgage repayments are greater than a certain percentage of household income – with further interest rate rises likely to push even more into the category. But with a growing number of mature-aged Australians saddled with mortgages, having bought property later in life, paid higher prices or still struggling to pay them off, the effects on them can be even more severe. “There’s been a large increase in the number of older Australians with mortgages and their debt- to-loan ratio has grown hugely,” says Professor Rachel Ong ViforJ, Australian Research Council future fellow and economics professor at Curtin University, who has carried out research on mortgage stress in those aged 55-plus. “Both the scale and magnitude of that, and the amount by which it had increased, surprised me. “We also found it having an extremely negative impact on the
polled 1,000 people for its Mortgage Stress Survey 2023 and broke the responses down by age. It found, of those aged 45 to 54, 30% were feeling the pressure, although hadn’t – yet – missed any repayments, 4% had missed repayments and 2% had missed multiple repayments and were in fear of losing their home. For those aged 55 to 64, 13% were feeling the pressure, 1% had missed repayments and 1% feared losing their home. In the 65-plus group, 7% were feeling the heat and 1% had missed a repayment. “We tend to think older Australians will have paid off their mortgages but that’s not true at all,” says Savvy spokesperson Adrian Edlington. “A lot of people in the higher age groups still have big mortgages and, with interest rates rising so steeply, a lot of them are feeling the pressure, and many are falling behind. “This is harder as you get older, especially in retirement when you’re not earning a salary or wage, and while losing your home could be absolutely devastating, it’s even worse during a rental crisis.”
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DARE SEPTEMBER-OCTOBER 2023
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