A new report released by the Australian Housing and Urban Research Institute (AHURI) has confirmed an alarming number of Australians are reaching retirement age while still burdened with a mortgage.
The AHURI study found that during the last 30 years, home loan debt amongst over 55’s has increased by 600%! Many are now looking towards their superannuation as a means of paying off debt after retirement, which in turn may leave them with substantially fewer retirement savings than they had planned. Clearly, the time to reduce debt is before you hit retirement age – not afterwards.
So, if you’re in your late 40’s or early 50’s, how can you start planning to pay off your debt before you’re ready to retire? To begin with, start by doing a thorough assessment of your finances.
In addition to a mortgage, are you also paying off credit card debt? Car repayments? Personal loans? All of these extras can really start to add up when you take into consideration annual fees and high-interest rates. Conversely, interest rates on home loans are at an all-time low, meaning this is an excellent time to look at refinancing with a view to consolidating your debts.
With only around 20 years to go until you’re at retirement age, it’s safe to assume that this could be one of your last chances to benefit from refinancing your mortgage. Banks that are willing to offer you 15-20 year terms on a mortgage now may be understandably wary of extending the life of your loan out past the average age of retirement. But this is actually good news for you.
Refinancing Your Home Loan
Refinancing your home loan as a means of debt consolidation will allow you to get rid of all that high-interest debt and combine it into one serviceable repayment. Factoring in the incredibly low mortgage interest rates on offer at the moment, you could end up paying the same amount each month (or possibly, even less), but with the total amount to be paid off in full before you reach a point where you’re ready to settle into a comfortable retirement.
However, as with any kind of loan, you do need to be careful when it comes to refinancing. If your new mortgage isn’t structured properly it could result in you struggling with even more debt, not less. If you’re keen to reduce your debt ahead of retirement and you want to make sure you get the best possible advice, then it makes sense to talk to the professionals.
For refinancing expertise that you can trust, contact North Brisbane Home Loans. You can speak to one of the experienced team members today on 07 3889 9719 or you can enquire online.