Australian families are now $160 billion ahead on their mortgages, squirreling away an extra $30 billion since the start of the GFC.
New Reserve Bank of Australia figures show borrowers are a record 14 per cent in front on their combined $1.14 trillion of housing loans.
About half of the nation’s three million home-loan customers have taken advantage of low interest rates to pay down debt at a pace the likes of which has never been seen according to an article on news.com
This is very different to prior to the GFC in 2008 when many Australians were using their homes as an ATM.
Australian Bankers’ Association chief executive Steven Munchenberg said:
“People are paying down their homes, they’re not drawing down on equity to pay for things which was going on during the GFC. House prices were going up and people were using the equity to invest or spend, but it would suggest they are not doing that now, they are very happily paying down their mortgages as quickly as possible.”
The RBA – which has cut its cash rate at the lowest level since 1960 – estimates borrowers are 20 months ahead on repayments. This is because most borrowers kept up the same loan repayments, as interest rates fell
The robust level of most household budgets means that most Aussie’s will not get into trouble if the economy takes a downward turn or unemployment rises.
It also means that in due course more of us will start to consider upgrading their homes while others will use the equity in their homes to invest in property.