Australians must work longer to pay off their home loans

Monday 08 March 2010

Article by Mozo

Aussies must work almost three times harder to pay off the average family mortgage than they did 50 years ago.

According to figures compiled by CommSec for the Sunday Telegraph, homeowners on an average income are now required to work for 19,374 hours to buy the average Australian house with the average home loan.

This amounts to about 10 years of work, though in reality it takes much longer to pay off a home loan given that wages must pay for all living expenses, not just housing.

The newspaper noted that in 1960, it took homeowners just 7,500 hours to pay off the average mortgage.

CommSec chief economist Craig James said that rising property prices are a major concern for people who choose to compare home loans.

"We’re building bigger and better homes, so it was always likely we were going to be paying more in terms of the mortgage – and we’re certainly working longer to pay for that," he said.

Last week, the 2010 Mortgage Choice First Homebuyers Survey revealed that more than one quarter of Australians looking to buy their first home in the next two years will give up on the purchase if interest rates rise by another two percentage points.

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