Australians Keeping Ahead of Their Mortgage
More than 50 per cent of Australian homeowners are ahead on their mortgage repayments, a Reserve Bank report shows. The figure is among the highest in the world. Despite a six per cent drop in the average home price in the last 12 months, households are continuing to top up their home-loan payments in an effort to lower their debt levels. The RBA report said about 15 per cent of home loan borrowers were two years or more ahead on repayments.
“Borrowers are repaying their mortgages ahead of schedule and are thereby building up buffers they could temporarily draw on to stay current on their loan repayments if their incomes were to fall,” the RBA's bi-annual report on financial stability said. The report found most households were “well placed to meet their debt obligations” with disposable income up four per cent this year. The only other developed country with such high levels of mortgage prepayments is Canada.