Is Australia’s future affordable?
Aussies are facing rising concerns over the financial futures of their children, research from NAB-owned MLC reveals, with a third of parents worried that their children won’t enjoy the same standard of living as they themselves have.
The research surveyed 2,000 Australians, almost 60% of which believed the next generation would never be able to afford to own their own home. And it’s no wonder, with the national median house price coming in at just below $700,000.
Not to mention that when a recent Mozo study crunched the numbers on saveablility in Australian capital cities, we found that in Sydney, where house prices are now averaging a cool $1 million, new home buyers saving a 20% deposit for a home loan would have to compile 3 years worth of savings to do it.
“We know that maintaining our lifestyle and financial security are our top priorities for Australians. However, Australians are telling us they are worried,” said Andrew Hagger, NAB Wealth Group Executive and CEO at MLC.
“There has always been the expectation that future generations will do better than us. Yet these findings paint a different picture. It’s concerning to see so many people worried about how their children will afford their own homes and live a comfortable lifestyle,” he added.
But it’s not just the next generation that Aussies are concerned about - over half of respondents were also worried about their own financial futures, fearing that in 10 years time they would be unable to maintain their current lifestyle.
Concerns about employment were at the forefront, with 56% of Aussies worried about job stability, while funding a comfortable retirement was a concern for two in five. One fifth said they’d be relying on a family inheritance to ensure their financial future and pay off a mortgage.
According to Mozo’s home loan repayment calculator, on a $700,000 loan, at the average interest rate of 4.71%, Aussie home buyers would be looking at monthly repayments of $3,975. However, if borrowers were to shop around and, for example, for a home loan provider with a rate of just 3.89%, they could save around $320 each month.
It’s potential savings like these that prompted Hagger to suggest Aussies seek financial advice when considering their futures. ‘Seeking quality financial advice can make a real difference for Australians as they save for retirement and I hope this research will help more people to think about their financial future,’ he said.
So, check out these top tips from Mozo for paying off your mortgage faster and saving on interest:
Compare home loan rates before you choose a borrower - make sure you’re getting the best deal up front.
Review your home loan regularly. Rates change, so make sure you stay on top of the market to ensure you’re saving as much as possible. This is especially important if you’re home loan’s fixed term has just ended - don’t just take the first offer your lender gives you! Shop around before committing.
Make use of the extra features included in your home loan deal, like extra repayments or an offset account to pay off the loan faster.
For more tips and tricks to get the best bang for your home loan buck, head over to our first home buyers hub.