If you still have a mortgage, there’s no need to worry

In August 2019, the Australian Housing and Urban Research Institute (AHURI) found that since the mid-1990s, the proportion of Aussies carrying a mortgage into retirement had more than doubled to 45%.

While more of us are holding a mortgage between the ages of 55 and 64 than in decades past, that’s not the institute’s biggest concern. What’s more worrying is the level of debt we’re carrying into retirement.

The study found that for older Aussies, the mortgage debt-to-income ratio tripled between 1987 and 2015 – from 71% to 211%. There are several contributing factors, but one of the main ones is that house prices tripled in this time and income only doubled. It meant average annual mortgage repayments went from $5000 to $17,000 and more than 25% of older mortgage holders were making loan repayments that exceeded 30% of their disposable income.

Easing some of this concern, the institute says that wealth held outside housing (think super and shares) has seemed to act as a reserve, allowing those at risk of loan default to continue making payments.

Ways to pay off the debt

James McFall, managing director and financial adviser at Yield Financial Planning in Victoria, says in his experience most retirees and pre-retirees would prefer not to have a mortgage. “It’s ideal that you don’t have