More than Half of Australians with a Mortgage are ahead

Posted on October 30th, 2012 · Posted in News

A recent RBA report states that more than half of Australia’s homeowners are ahead on their mortgage repayments – among the highest level in the world.

Despite a 6 per cent drop in the average home price in the last 12 months, households are continuing to top-up their mortgage payments in a bid to lower their debt levels.

The report from the RBA shows about 15% of borrowers are two years or more ahead on repayments.

More than 50 per cent of owner-occupiers are ahead on their repayments while around 40% of investors are in front.

The RBA report also shows household savings have stabilised with Australians banking about 9.5c of every disposable dollar earned over the past five years as they adopt more circumspect financial behaviour in the aftermath of the GFC.

The report shows most households are “well placed to meet their debt obligations” with disposable income up 4 per cent this year.

The only other developed country with such high levels of mortgage pre-payments is Canada.

The RBA has cut interest rates by 1.25 per cent since November last year and is widely tipped to lower the official cash rate by 0.25 per cent in October or November.

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