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Young Australian borrowers are flocking to longer term loans in a bid to combat housing affordability.
Savings & Loans Credit Union today reported a sharp rise in the popularity of its 40 year mortgage, with the loan now accounting for 30 per cent of total mortgage sales since its launch in April 2007.
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With 35 per cent of the credit union’s 40 year mortgage customers aged under 30, chief executive of Savings & Loans Greg Conner said the product’s popularity with young people reflects the growing difficulty they are facing in entering the property market.
“We knew that offering our members 40 year mortgages was going to help many young Australians... but we’ve been surprised with just how popular it's been,” Mr Conner said.
With few Savings & Loans home loans lasting their full term, Mr Conner sees the 40 year mortgage as a stepping stone for those entering the property market.
“Once the borrowers become more established and their circumstances change, we encourage them to shift to a 30 year (or shorter) term,” he said.
Published: 25-02-08
