Key takeaways
The average first-home buyer is now in their mid-30s, with one in five new loans going to buyers over 40, meaning many will still be paying off mortgages well into retirement.
In 1981, most Aussies owned their homes outright by 52; now it’s closer to 62. Over half of Australians aged 55–64 still have mortgage debt, showing how dramatically the landscape has shifted.
Escalating housing costs, sluggish incomes, and longer times spent saving for deposits have delayed homeownership and extended debt lifecycles.
Older borrowers may need to work longer, downsize earlier, or use more of their super to service loans, putting additional pressure on both households and government support systems.
Despite these challenges, owning property remains a proven wealth builder.
Success now depends on buying investment-grade assets, managing debt effectively, and aligning property decisions with long-term wealth goals.
Imagine reaching retirement age, finally ready to enjoy the fruits of decades of hard work, only to realise you’re still sending monthly repayments to the bank.
That’s the unsettling reality facing a growing number of Australians, as homeownership is being delayed later and later in life.
For generations, the great Australian dream was simple: buy a home in your 20s or early 30s, pay it off by your 50s, and enjoy a mortgage-free retirement.
But that dream is slipping further out of reach.
Older first-home Buyers, longer loans
New data shows that first-home buyers are getting older and staying in debt for longer.
Westpac’s latest lending figures reveal that one in five first-home buyer loans over the past year went to Australians aged over 40.
The average age of a first-home buyer has risen to 34 across the bank’s network, up two years since 2020, while other sources such as UNSW put it closer to 36.
With most mortgages stretching over 30 years, that means many new homeowners will still be making repayments into their late 60s or even 70s, well past traditional retirement age.
A generational shift in homeownership
It wasn’t always this way.
Back in 1981, the average Australian paid off their mortgage by age 52.
By 2015, that had jumped to 62, and the gap keeps widening.
Research from the Australian Housing and Urban Research Institute (AHURI) shows that in 2019, 54% of Australians aged 55–64 still had mortgage debt, compared to just 18% in 1996.
Even among retirees, 9% of those over 65 still owed money on their homes, up from 4% two decades earlier.
The trend is clear: we’re entering a new era where carrying debt into retirement is becoming the rule, not the exception.
Why this is happening
There’s no single culprit; it’s the cumulative effect of several structural shifts.
Escalating property prices have far outpaced wage growth, making it harder for younger Australians to save a deposit.
Add to that the rise of insecure work, the cost of living crunch, and the fact that more people are studying longer and starting families later, and it’s easy to see why first-home ownership has been delayed.
Even government schemes like the First Home Guarantee, while well-intentioned, may unintentionally stretch borrowers further by encouraging higher leverage and smaller deposits.
- Also read:December Reports Remarkable Annual Home Price Growth | Latest stats from Dr. Andrew Wilson
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- Also read:Adelaide housing market update | December 2025
- Also read:Brisbane housing market update | December 2025
- Also read:Perth housing market update | December 2025
The consequences for retirement
This trend isn’t just a financial problem, it’s a social and generational one.
The traditional retirement model assumed that by the time you stopped working, you owned your home outright, reducing living costs dramatically.
But if you’re entering retirement with 10 or 15 years left on your mortgage, that equation changes entirely.
You’re either forced to work longer, downsize earlier than planned, or divert more of your super to debt repayments, leaving less for living expenses and healthcare.
This could also have broader economic implications.
More retirees relying on government support or selling down assets to stay afloat could put pressure on the social safety net.
A changing mindset
For many Australians, homeownership remains a priority, but it’s now seen more as a long-term investment than a short-term goal.
There’s also a growing acceptance that mortgages may extend into later life, especially if property ownership is viewed as a wealth-building tool rather than just a place to live.
Still, this shift requires a different mindset, and smarter financial planning.
Those who succeed in this environment aren’t just buying any property; they’re buying strategically.
That means:
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Choosing quality over quantity – investment-grade assets that deliver long-term capital growth.
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Managing debt efficiently – focusing on loan structure, offsets, and extra repayments early.
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Thinking long-term – aligning property purchases with broader wealth-building and retirement strategies.
The bottom line
The dream of being mortgage-free by retirement may be fading for many Australians, but that doesn’t mean financial independence is out of reach.
Property remains the most powerful and proven wealth-building tool available to everyday Australians.
The key is not just buying a home, it’s buying the right home at the right time, and having a strategy that ensures your money works for you over the long term.
Yes, more of us will retire with a mortgage, but with the right approach, we can still retire with security, stability, and the comfort of knowing we own a valuable, appreciating asset that will serve us for life.
