Home ownership is still a major source of financial security, but it’s not the only one

Australian notes and coins.

While home ownership remains the most surefire - though by no means easy - means of achieving financial security, a new report finds that a number of factors contribute to overall financial satisfaction. 

Commissioned by Your Financial Wellness, the survey of more than 3,000 Australians found that those who own their home outright reported high levels of financial wellness, returning an average score of 7.9 out of 10. 

Meanwhile, renters scored just 5.1, much lower than the 'average' financial wellness score of 6.4 and just shy of a score of 5, which would indicate significant levels of financial stress.

Those looking to buy their first home received a score of 6.7, reflecting the optimism and security that comes with having a deposit. However, this drops to 6.3 once a property is purchased and the pressures of paying off a mortgage begin to take their toll.

While property ownership was an undeniable predictor of financial satisfaction, the ability to repay debt and save money also had a profound impact on individuals’ overall financial health.

Unsurprisingly, the report found insufficient savings to be a key source of stress, though financial wellness improves markedly once respondents report savings equal to 1 to 2 months of their salary.

Savings strongly correlates with financial wellness

SavingsFinancial wellness score
No savings4.0
< 1 months salary5.6
< 1-2 months salary6.9
< 3-6 months salary7.8
+ 6 months salary8.1

Nonetheless, Teachers Mutual Bank chief executive Steve James said the findings were an important reminder of wealth-building effects of property ownership, and the role financial institutions can play in helping Australians secure their first home.

There are currently a number of government programs aimed at helping first home buyers. These include the First Home Loan Deposit Scheme and the First Home Owners Grant, which both subsidise the purchase or construction of new homes.

Further assistance is available via the Family Home Guarantee, a targeted program which lets eligible single parents with dependents purchase a property with a deposit of as little as 2 per cent.

For many, these incentives have helped lower the barrier to home ownership posed by soaring prices, but James reminds prospective buyers that there are hurdles beyond saving up a deposit.

“It is important to remember the other additional costs that come with purchasing a property and moving, such as stamp duty, removalist fees, electricity, gas and internet connection, home and contents insurance.”

He also advises against becoming fixated on finding the perfect property, as the majority of Australians are unlikely to stay put in their first home.

“It may be helpful to think about the potential resale value it has in the future. Consider things like travel distances, proximity to transport, retail, and schools that may be of value when looking to sell the property down the track.”

For more useful tips, browse our guide to tackling your first mortgage. And for an overview of home loans currently on the market, visit our home loan comparison page, where you’ll be able to filter your search by rate and type.

Home loan comparisons on Mozo - last updated 9 December 2023

Search promoted home loans below or do a full Mozo database search . Advertiser disclosure
  • Home Variable Rate

    Owner Occupier, Principal & Interest, Refinance Only

    interest rate
    comparison rate
    Initial monthly repayment
    6.15% p.a. variable
    6.15% p.a.

    Enjoy a competitive variable interest rate from Up. No application, monthly, annual, redraw, or discharge fees to pay. Up to 50 free offset accounts available. Up home loans are only available to owner-occupiers buying or refinancing in major Australian cities. Up is 100% owned by Bendigo Bank. New joiners get $10 by signing up to the app using code UPHOMEMOZO. (T&Cs apply) Mozo Experts Choice award winner.

    Details
  • Mozo Expert Choice Badge
    Variable Rate Home Loan Special Offer

    Package, Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.51% p.a.

    Package benefits across Home Loans, Visa Credit Card, Personal Loans and Term Deposits. No package fee for the first year. No application, settlement or redraw fees to pay. Quick and easy application. Free CoreLogic RP Data property reports. *Terms, conditions and lending criteria apply.

    Details
  • Mortgage Simplifier

    LVR<80%, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    6.14% p.a. variable
    6.43% p.a.

    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws. Winner of Australia’s Best Essential Bank in the Mozo Experts Choice Awards.

    Details