Mortgage debt causing older Australians distress and worsening mental health

PHOTO: The study found struggling to pay off a mortgage later in life leads to mental distress. Unsplash: Tierra Mallorca

The burden of mortgage debt is leading to mental distress and worsening mental health outcomes for older Australians, who are now often carrying unsustainable mortgage repayments into retirement, a new study has found.

Key points:

More Australians are finding it difficult to pay off their mortgage before retirement
Mortgage debt among older Australians has outstripped growth in asset prices, incomes
The lead author says more retirees are likely to rely on the aged pension after using super to pay off their mortgage

Average mortgage debt among older Australians has blown out by 600 per cent since the late 1980s after accounting for inflation, the study says, and nearly half of all homeowners aged 55 to 64 are still paying off a mortgage, up from just 14 per cent 30 years ago.

“These statistics are quite shocking,” said Rachel Ong ViforJ, professor of economics at Curtin University and lead author of the study for the Australian Housing and Urban Research Institute (AHURI).

“More and more older Australians are finding it increasingly difficult to pay off their mortgage debt before they retire.