Get more Zen’: More Aussies will have mortgages hanging over them at retirement
An upsetting reality awaits millions of Aussies working to own their own home outright, with one expert sharing a surprising insight.


News.com.au
January 5, 2025

As house prices remain stubbornly high, it’s becoming more likely Australians will be paying off their mortgages into their 70s and won’t be able to retire on time.   

Predicting what effect expensive house prices will have on owners in 30 to 50 years is a tall order.

Multiple academics told NewsWire that creating a model on ‘how long will current mortgages take to pay off’ was too difficult an exercise. The Australian Bureau of Statistics said they couldn’t figure it out either.

But more and more Australians are undoubtedly reaching retirement without owning their home outright; whether they still have a slice of their mortgage, or they are renting.

The lengths of mortgages will likely extend after this period of high interest rates, but projecting the increase is a tough task. 
Griffith University senior business lecturer, Di Johnson, says there are a host of “politically unpalatable” options which could have more retirees in homes they own.

“There’s wide-ranging policy implications on the mortgage market development in Australia. For example, long-term mortgages, rethinking age bias in responsible lending obligations, shared equity, social housing and tax changes – lots of politically unpalatable choices to make,” she said.

Dr Johnson said the way Australia’s housing market is headed, people needed to accept owning their home when they retired would simply not happen for everyone.   

“We need to get a lot more Zen with mortgages in retirement … but I completely understand why we’re not,” she said.

Rising interest rates on the back of the pandemic have put older renters under the same stress as young tenants.

“Still, it’s far worse to fall out or opt out of homeownership even with a very long-term mortgage and then rent in retirement, rather than pay some amount of mortgage in retirement.”


Census data shows from 2000 to 2020, the number of Australians aged 55 to 64 who owned their homes outright has plummeted from 64 per cent to 36 per cent.

Researchers with Housing For The Aged Action Group, Swinburne, Curtin and Western Sydney university used ABS data to publish a detailed analysis in 2023.

It showed the percentage of older people who own their own homes outright by age 55 has declined and the percentage of those reaching 55 years of age with mortgage debt has increased.

“While the majority of older people will retire as homeowners, the last two decades have seen growing signs of housing insecurity,” the researchers found. 


In 2011, 19 per cent of over-55s still had a mortgage. In 2021, that had increased to 23 per cent.

“It is beyond the scope of this report to assess the dollar scale of mortgage debt among older people, however, other evidence indicates that this can be considerable with consequences for financial security in older age,” the researchers concluded.

Melbourne mortgage broker Luke Coates says generally more clients approaching retirement age are planning to work longer out of necessity.

But this period of high interest rates has almost split the mortgage-holding, near-retirement class in two: Investors who saw the interest rate rise coming and offloaded a property, versus people who were stretched and paying interest only on their mortgage.

Dr Di Johnson says there are politically unpalatable options to addressing the problem of more retirees still holding mortgages.

Another factor Mr Coates has identified is the Victorian tax system: “More than any time in the last 15 years, people are selling”.

Data out this week shows Australian house values decreased in December – the first monthly slide in almost two years.

REA Group analysis pointed to Victoria’s tax regime as a boon for housing supply, as investors exit the market.

The house value data shows Sydney house values rose 2.3 per cent in 2024, to $1.19m.

Sydney mortgage broker Craig McDonald said some clients were pushing back retirement out of necessity.   

whiteknight wrote on Jan 5^th, 2025 at 9:43am:

How old are you?
Are you eligible for an age pension?
Do you have a mortgage?

When Bismarck first introduced the age pension in the late 19th century, he set it at age 70. He was himself 74.
The life expectancy in Germany at the time was about 50.
It was lowered to 65 years in 1916, when the life expectancy was around 58.

Life expectancy now is around 80.
https://www.aihw.gov.au/reports/life-expectancy-deaths/deaths-in-australia/conte...

The promise years ago was that the majority would enjoy more leisure time.... instead they have to work on and on ... with costs rising and rising... the Eld Gel said last night that on the news a pint of beer could go to $15.  I asked where?

What this is, in reality, is runaway inflation - but shifting the goal posts has created a different 'definition' of 'inflation' .. a sort of Pascoeist Economic view ... oh - it's not inflation when costs race away from incomes - that's just a normal balance of golden skies for everybody... what's good for the cost suckers and parasites is good for everyone... um... yeah ...

Cue dividie with his flawed capitalist non-centrally controlled economic nonsense... WTF does he think makes the 'policy' that actually creates these problems?  The only question is why - apart from their own clear self-interest in promoting their 'investments' in property and shares - in which case politicians will do anything to keep the ball rolling over the top of millions of others 'on the beach' and in tent cities.... and then bring in 'replacement migrants' to pick up the 'slack' from all those displaced Australians being far removed from any real work opportunity.... most of it piece work or part-time casual anyway and thus meaningless in any real terms.

I keep telling you all we need a new party that is for real....

Yeah Mr. G…. We heard that too! Glass beer $15 
What’s the prediction for 2025? Rising costs? More businesses closing down?
And then in come the distractions to avert our interest away from it all?
What predictions for distractions? A new war? A new virus? Etc

Something came to mind… after reading people won’t be able to retire on time due to long term huge loans… then there’s a thing called reverse mortgage so people can enjoy their twilight years etc

As for pension payments… those of us that worked and paid taxes have earned it… there was a tax rise of 17% about the late 1940s?
It was to go towards pensions.
Then government changes put it all into consolidated revenue and pfft… Abracadabra… watch it disappear!

All government income goes into Consolidated Revenue. It is the law, Treasury Act.

Government doesn’t save money in a passbook.

Booby knows all about theft tho, practical experience.

lee wrote on Jan 5^th, 2025 at 3:33pm:



Now they can't pay us our pensions unless they get the RBA to print money.   WTF?

Jasin wrote on Jan 5^th, 2025 at 3:44pm:



Tell that to a builder whose knees and back are stuffed at the age of 50.