Mortgage stress and precarious home ownership: implications for older Australians

Abstract

This research investigated the growing numbers of middle aged and older Australians who are carrying mortgage debt into retirement and paying off higher levels of debt relative to house values and income. Between 1987 and 2015, mortgage debt among older mortgagors increased by 600 per cent (from $27,000 to over $185,000). These trends have significant consequences for older Australians’ wellbeing, retirement wealth management and government incomes policy and housing assistance programs.

Gender differences are quite pronounced.

Amongst older mortgagors, women generally have lower levels of mental health and higher levels of psychological distress than male mortgagors. The K10 distress score for older female mortgagors is 15.9, compared to the 14.6 score for older male mortgagors. The average SF-36 score for older female mortgagors is 73.5, compared to 77.1 for older male mortgagors. Older female mortgagors’ SF-36 mental health is also more sensitive to personal circumstances than older male mortgagors’. Marital breakdown, ill health and poor labour market engagement all adversely affect women’s SF-36 mental health scores more than men. Policy makers need to note the interaction of these factors, which result in female mortgagors being more vulnerable to mortgage indebtedness problems as they age, and will likely have implications for the kinds of housing and financial support that older women will need.