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More borrowers consider their mortgage a burden than a benefit

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Reporter 2 minute read

More than half of Australian mortgagors consider their home loan to be a burden, while just 44 per cent believe it is a benefit, according to new data.

The findings come from a new research by Gateway Credit Union titled Mortgage Holders Sentiment Report, which surveyed 1,030 Australians from 12 to 18 September 2017.

The research found that more than half (56 per cent) of the respondents that said they are currently paying off a mortgage or have paid off a mortgage thought their home loan is/was a burden which somewhat “limited their lifestyle”.

Contrastingly, 44 per cent of the mortgagors said they believed their home loan is/was a benefit and somewhat assisted their lifestyle.

Speaking about the results, Gateway CEO Paul Thomas believes that it could be indicative of a broader problem. “We know Australians are heavily indebted. The latest figures from the Australian Bureau of Statistics (ABS) found that around three in 10 households (29 per cent) were classified as ‘over-indebted’.

“In fact, the ABS research also revealed [that] owners with a mortgage were the most likely households to be over-indebted (47 per cent).

“It would seem Australians still want to achieve the dream of owning their own property, even at the expense of financial stress. As a result, their home loan becomes a pain point rather than an advantage.”

The research report went on to highlight that Australians are more likely to feel their home loan is a burden today, compared to two years ago.

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In 2015, 45 per cent of mortgage holders stated that their home loan was “at least somewhat of a benefit”; this proportion had dropped to 40 per cent in 2017.

“We know times have become tougher over the past few years,” Mr Thomas said. “CoreLogic recently reported property price growth across all capital cities is at a seven-year high (12.9 per cent). Not to mention, wages growth remains stuck at a record low, sitting under 2 per cent.

“All these factors seem to be contributing to our dissatisfaction when it comes to the cost of home ownership.”

Unsurprisingly, mortgagors in the states with higher house prices were more likely to consider their mortgage a burden.

Home owners in VIC (59 per cent) and NSW (56 per cent) said that their home loan was a burden, compared to 47 per cent in QLD.

“Owning a home should provide a sense of achievement and pride,” Mr Thomas said.

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“However, it’s not surprising to find that many view paying off their home as an encumbrance. It’s one of the biggest financial decisions you will make in life, so borrowers need to do their due diligence before buying a property.”

He concluded: “There are many advantages to owning your own home, and while a mortgage is considered ‘good’ debt, borrowers need to make sure they’re not over-stretching themselves and taking on more than they can handle.”

The rising levels of household debt and increasing reports of mortgage stress have been hitting the headlines recently. Moody’s Investor Service warned that elevated levels of household debt may trigger a slowdown in the Australian economy, and some research suggested that almost a million Australians are under mortgage stress.

[Related: Fresh fears over high levels of household debt]

More borrowers consider their mortgage a burden than a benefit
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