New Report shows increasing mortgage debt in retirement.

24 April 2017

The Australian Institute of Superannuation Trustees (AIST) released a report in late March entitled No place like home: the impact of declining home ownership on retirement. This report tells the story of the changing home ownership rates in Australia, and how it is influencing the current and future retirement quality of Australians as our ageing population continues to increase.

I found this report quite interesting, particularly:

  • there is an assumption in Australia’s retirement system that retirees have low housing costs, and in many circumstances this is no longer the case;
  • there is a large number of people that may be expected to support themselves in retirement without relying on the aged pension;
  • how complex and difficult it will be to change declining home ownership and increasing mortgage debt trends, and the continuing issues with both demand and supply in the housing market; and
  • the current length of time people hold mortgage debt for, and the level of this debt (for homeowners aged 55-64 the rate has nearly tripled since 1996).


This kind of debt puts pressure on retirement income and the report suggests a proportion of those retirees with a mortgage have chosen to draw on super to pay off this mortgage debt. Using super to pay off debt does assist with reducing regular debt repayment expenses, however it also compounds the retirement savings shortfall. Reducing super balances, and more restrictive Government pension entitlement tests, means that it can be difficult to make ends meet.

Aside from the rising cost of living in Australia, most seniors also at some point require funds to pay for one-off costs such as medical expenses, home repairs, visiting family, and car maintenance. Finding money for these needs can be very stressful. An option to meet this gap is a reverse mortgage, and it can be a great complement to superannuation and government pensions as it allows extra financial breathing space.

Here at Heartland, we have helped thousands of seniors access the equity in their home to live a better retirement by relieving the financial stress of everyday bills and those unplanned one-off costs. Our reverse mortgage is very flexible, with the option to draw funds as a lump sum, regular advance, a cash reserve for future needs, or a combination of all three.

The Heartland Seniors Finance Reverse Mortgage provides seniors the financial freedom and peace of mind to enjoy the retirement they deserve with independence and dignity. If you would like to discuss how a reverse mortgage works, or how it could help you, please feel free to contact our friendly team on [email protected] or 1300 889 338.


Information provided is accurate as at 24 April 2017 and may change from time to time