Almost a third of people won’t have paid off their mortgages by the standard retirement age of 65, according to a shock bank report.
A generation of “grey” borrowers face either working longer, using their KiwiSaver pot to pay off the debt, or hope equity in their homes will solve the problem by downsizing.
Exclusive research from BNZ shows even current, historically low interest rates have not been enough to coax many people to get ahead in paying off their home loans.
Mortgage rates are at their lowest point since the 1960s, but research by Colmar Brunton for BNZ, found more than 60 per cent of home owners were not using this opportunity to pay off their home loans faster.
Craig Herbison, BNZ’s director of retail and marketing, said many people were taking a ‘she’ll be right’ approach to what is most often the biggest financial commitment of their lives.
“If the current rate environment isn’t motivation enough, I don’t know what is,” Herbison said.
“Our research found 74 per cent of people claim they’re concentrating on reducing and minimising their overall level of debt, but they’re ignoring the biggest and most important one.”
The research also showed a yawning gulf between borrowers’ behaviour and their aspirations.
Just over half the people polled wanted to retire early, with most believing the mid 50s years is the ideal time to be mortgage-free, researchers found.
Yet the average, actual age for people to people to clear their mortgages was 60. Only 37 per cent of people with mortgages had done the smart thing and kept their mortgage repayments the same after rates fell so they could pay off their loans faster.
Original post: http://www.stuff.co.nz/business/money/72598973/A-third-of-Kiwis-will-have-a-mortgage-at-65
Original article from Stuff.co.nz – OCT 15