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 fact, O'Leary insists that it's a good idea to be debt-free by age 45 -- and that includes having your mortgage paid off. Of course, it's one thing to shed a credit card balance by age 45. But many people don't first buy a home until they reach their 30s.
Home ownership data from the 2021 Census show a home ownership rate of 67%, down from 70% in 2006. While the home ownership rate remained around 67–70% from the early 1970's, the rate for different age groups has varied markedly over this time.
50 years old: Most lenders will allow you to borrow but some may decline your application due to your age. 55 years old: Almost all lenders will require a written exit strategy, evidence of your superannuation and other assets that can be sold to repay the proposed debt.
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.
What do we consider a “comfortable” retirement? A helpful cost of living benchmark prepared quarterly by the Association of Superannuation Funds of Australia (ASFA), shows an average single person needs approximately $595,000 in superannuation before retiring, while a couple requires around $690,000.
How much is the average Australian in debt? According to a study from Invezz, Australia's household debt is the fifth highest in the world, at about $86,000 per household. Given that the average available income is only $42,554, the amount of debt owed by households is a whopping 203%.
Lenders have set the maximum age limit for a traditional mortgage to range from age 70 to a maximum of age 80. You can see how borrowers, aged 70, would be unable to secure a 25-year mortgage as they would be 95 years old when they were done paying off the loan.
Mortgages for over 50s
Many lenders will be happy to offer you a mortgage if you're over 50, with a standard 25-year term and competitive interest rates often available. In some cases, you may be asked to show evidence of your predicted retirement income.
Yes, a senior citizen can get a mortgage.
Many interest only lifetime mortgage providers don't restrict the term of their mortgages, so you are able to borrow over the term of your lifetime.
1.6% of Australians own 2 investment properties.
Here's how many properties investors hold in Australia: 5% of investors hold 1 investment property. 18% of investors hold 2 investment properties. 7% of investors hold 3, 4, or 5 investment properties.
The average mortgage around Australia
Looking at all new home loans (excluding refinancers), the average loan amounts for each state are: New South Wales (NSW): $752,164. Australian Capital Territory (ACT): $636,747. Victoria (Vic): $618,109.
What are the benefits of being mortgage free? Having more disposable income, and no interest to pay, are just some of the great benefits to being mortgage free. When you pay off your mortgage, you'll have much more money to put into savings, spend on yourself and access when you need it.
The Bottom Line
Paying off your mortgage early can save you a lot of money in the long run. Even a small extra monthly payment can allow you to own your home sooner. Make sure you have an emergency fund before you put your money toward your loan.
It's typically smarter to pay down your mortgage as much as possible at the very beginning of the loan to save yourself from paying more interest later. If you're somewhere near the later years of your mortgage, it may be more valuable to put your money into retirement accounts or other investments.
Age doesn't matter. Counterintuitive as it may sound, your loan application for a mortgage to be repaid over 30 years looks the same to lenders whether you are 90 years old or 40.
There are plenty of mortgage providers who are prepared to lend to people in their 50s and you can usually get a 25-year term. You shouldn't see a difference in the mortgage rates offered to you compared to a younger applicant, although you may be asked about your predicted retirement income.
A lifetime mortgage is a type of equity release, a loan secured against your home that allows you to release tax-free cash without needing to move out. Lifetime mortgages are available to homeowners aged 55 or over. You can take the money as a lump sum or as series of lump sums.
Lenders typically base their mortgage decisions on an applicant's income, assets, debts and credit score. Discrimination against credit applicants on the basis of age is prohibited by the Equal Credit Opportunity Act.
A lender generally can't deny your loan application or charge you higher interest rates or fees because of your age. This rule applies to various types of lenders when they're deciding whether to give credit, such as an auto loan, credit card, mortgage, student loan, or small business loan.
Mortgage terms explained
If you're like most people, you'll be on a repayment mortgage. This means that your plan and repayments are set up so that you'll eventually own your property outright. In other words, if you're on a 25-year term, after 25 years your house will finally be all yours.
But as a general rule of thumb, a debt/income ratio of 10% or less is outstanding. If it's between 10 to 20%, your credit is good, and you can probably borrow more. But once you hit 20% or above it's time to take a serious look at your debt load.