Australians are among the most indebted people in the world but are also the most comfortable carrying high levels of debt, according to a new global survey by mortgage insurer Genworth.
The Genworth International Mortgage Trends Report is based on a survey of 9,000 homeowners from Australia, Canada, India, Ireland, Mexico, the United States and the United Kingdom.
According to the survey, 39% of Australians use more than half of their income to service debt, while 45% said they overpaid their mortgage last year.
With regard to purchasing a house, more than a third of Australians said they were comfortable borrowing more than 80% of the property; the highest rate among the countries surveyed.
Genworth Australia chief executive Ellie Comerford says Australians are the most relaxed about being highly leveraged, whether for financial or cultural reasons.
According to the survey, the majority of Australian homeowners feel comfortable about paying their mortgages, with four out of five saying they had no trouble meeting their payments in the past 12 months.
Also 45% were ahead in their mortgage repayments; well above the average of 26% in other surveyed markets.
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Confidence in the domestic economy was also higher among Australians than the total survey average, with 37% expressing confidence in economic prospects, compared with an average of 30% across the countries surveyed.
However, the survey found only 37% of Australians feel positive about their own financial situation, which is similar to the global average but much less than that of India and Mexico, where people are more optimistic about their personal finances despite living in relatively poor countries.
The rising cost of living was the main cause of concern, with 84% of Australians saying it could affect their ability to make mortgage payments in the next 12 months.
The report also reveals the average homebuyer across the eight countries is aged 30, while in Australia the average age is 28.6, suggesting Australians are in a better position to buy than aspiring homebuyers in other countries.
Meanwhile, another report titled Risking Everything, from the Association of Financial Advisers, reveals only two in 10 Australians receive advice relating to life insurance.
AFA chief executive Richard Klipin says the figure is alarming.
“Australians believe insuring their homes, their cars and their health is more important than insuring their lives,” he says.
“Less than a third of those with life insurance, and only 5% of those without life insurance, rate it extremely important.”
“The fires, floods, earthquakes, tsunamis and nuclear leaks of the past 12 months are bringing into stark focus the issues of risk for the Australian community,” he says.
“Risk management must be part of the national agenda for families, businesses, companies, governments and regions.”