Among 55 to 64-year-olds the proportion of mortgage holders in that age group has more than doubled, rising from 15.5 per cent to 35.9 per cent, and the number of people with a mortgage at retirement age or older has risen from 3.2 per cent to 9.6 per cent.
It's increasingly common for Australians to head into retirement with a mortgage. This is true for about 6% of retirees, and that figure is expected to grow as housing prices rise faster than earnings.
Home ownership rates of Australians born during 1947–1951 increased from 54% in 1976 (when they were aged 25–29) to 82% 45 years later in 2021 (when they were aged 70–74).
Assuming that the average mortgage age in Australia starts somewhere between 25 and 34 years, then to work out the average age to pay off a mortgage in Australia, you just need to add a 25 to a 30-year term. This would make the average age to pay off a mortgage in Australia between 50 and 64 years.
In 1991, 41% of Australian homes were owned outright, while in 2021 the figure was 31%, the same as it was in 2016. The percentage of homes owned with a mortgage grew slightly from 2016, from 34.5% to 35%.
So what is the average mortgage? At the end of 2022, it was $601,797, based of lending indicators from the Australian Bureau of Statistics (ABS).
1.6% of Australians own 2 investment properties.
A mortgage has become a bigger and more significant part of the lives of Australians. The number of Aussies who own their home with no debt has halved over the past 20 years, while the number of retirees ending work with a mortgage has tripled.
You should aim to have everything paid off, from student loans to credit card debt, by age 45, O'Leary says. “The reason I say 45 is the turning point, or in your 40s, is because think about a career: Most careers start in early 20s and end in the mid-60s,” O'Leary says.
The average mortgage term is 30 years, but that doesn't mean you have to get a 30-year loan – or take 30 years to pay it off. While it offers a relatively low monthly payment, this term will likely require you to pay the most in total interest if you keep it for 30 years.
The average super balance for people aged 50 to 54 during 2015–16 was $135,290 the ASFA report found. For people aged 60 to 64 this figure increases to $214,897 and for 65-69-year-olds, it drops to $207,105 as people start drawing down their super.
Your home and the pension
If you are retired your major asset may be the home you live in. Centrelink does not count your home as an asset when calculating your pension if it is your 'principal place of residence' – any residence you occupy or in which you have an interest or the right to occupy.
around 60% were living alone. 55% were returning clients. 30% were currently experiencing a mental health issue. 15% were Indigenous.
It's fair to assume that the average Australian might hope to live comfortably, if not lavishly, in retirement. The widely reported ASFA Retirement Standard suggests couples can enjoy a 'comfortable lifestyle' on around $70,000 a year and singles on around $49,000.
If you had, say, $200,000 in superannuation and investments at age 50, you would need to save around $300 per month, earn around 6% p.a. on your savings and become debt-free in order to reach the target of $600,000 by age 65.
You can use your super to pay off your mortgage when you retire, provided you have attained your superannuation preservation age and satisfied the superannuation definition of retirement.
The majority of buy-to-let lenders have maximum borrower ages at the time of application between 75-80, although a handful of lenders might allow you to reach 85 depending on your circumstances and ability to meet their criteria. Therefore getting a 25-year buy-to-let mortgage may well be possible if you're 50.
The accepted retirement age varies between lenders, from 65 to 75 years of age. Many lenders will not approve a loan for someone over a particular age, particularly if you're over the age of 60.
Paying off your mortgage early could free up your cash for travel, retirement, or other long-term plans. Being mortgage-free may insulate you from losing your home if you run into financial difficulties.
The number of Australians 'At Risk' of mortgage stress has increased by 486,000 over the last year as the RBA increased interest rates for nine consecutive monthly meetings. Official interest rates are now at 3.35% in February 2023, the highest official interest rates since October 2012 over a decade ago.
“If you're earning A$150,000 a year or A$120,000 a year before you retire, then you might need A$70,000 or A$80,000 in retirement. But if you were earning A$50,000 beforehand, then you probably need A$35,000 to A$40,000 in retirement.”
Income. This is the most important factor in determining how much you can borrow on your home loan. As a guide, it's best if your repayments don't exceed 30% of your after-tax salary. Use our calculators to get a good idea of what your repayments will be once you start making mortgage repayments on your new loan.
The mining magnate Gina Rinehart is Australia's biggest landholder, controlling more than 9.2m hectares, or 1.2% of the entire landmass of the country, according to data compiled by Guardian Australia.
Buyers from China dominate foreign investment in Australian residential real estate, with $1.6 billion in proposed purchases approved in the six months to the end of December last year, official figures show.
According to the ATO, Australia has 2,156,319 property investors, most of whom own just one property. The ATO figures show that 71% of people who own investment property have just one, while a further 19% own two properties. Less than 1% of investors own five properties and less than 1% own six or more properties.