Australians aged over 50 are carrying mortgage debt closer to retirement, leaving some households vulnerable to higher repayments and reduced retirement incomes.

Older homeowners are facing renewed pressure after the Reserve Bank lifted the cash rate by 25 basis points to 4.85 per cent, its fifth increase this year.

The decision, which took effect on 4 November, pushed the cash rate to its highest level since 2008. The rate has risen from 3.60 per cent at the start of the year, with increases in February, March, May, September and November.

For older Australians still paying off a home loan, higher repayments can place pressure on a fixed or shrinking income and reduce the money available for retirement.

Australian Bureau of Statistics data shows the proportion of homeowners aged 55 to 64 with a mortgage rose to 54 per cent in 2019 to 2020, up from less than 20 per cent in 1996.

The average mortgage for people in that age group was about $230,000 in 2019 to 2020. The median age at which Australians paid off their home also increased from 52 in 1981 to 62 in 2016.

Research by the Australian Housing and Urban Research Institute found the proportion of 55 to 64-year-olds still paying off a mortgage increased from less than 20 per cent in 1996 to 45 per cent in 2013.

The research also found mortgage debt among older borrowers grew faster than both house prices and incomes between 1987 and 2015. Debt increased by 600 per cent during that period, from $27,000 to more than $185,000.

AHURI warned that older homeowners experiencing difficulty meeting repayments could draw down on their superannuation to reduce their mortgage debt.

That can leave less money available to fund living costs in retirement and increase future reliance on the Age Pension.

The organisation also found mortgage repayment difficulties were associated with reduced mental health and wellbeing among older borrowers, with the impact more pronounced for women.

The latest rate increase has prompted more older homeowners to consider ways to reduce or clear their mortgages without selling their homes, according to enquiries recorded by home equity provider Homesafe.

The company said enquiries rose by an average of 25 per cent around earlier rate increases this year compared with the same months in 2025. It said 80 per cent of people who made enquiries this year cited paying off a mortgage as their main reason, up from 60 per cent last year.

Homesafe chief executive and managing director Dianne Shepherd said many older homeowners had planned their retirement when interest rates were much lower.

“If you are 62 with a mortgage, it may not be possible to work another 10 years to cover a bigger repayment,” Ms Shepherd said.

“Your income is what it is, and every rate rise comes out of what you live on.”

Ms Shepherd said some homeowners were looking for ways to remain in their homes while reducing their debt.

“The homeowners who call us are not after another loan,” she said.

“They want to pay off what they owe and stay in the home they have spent most of their lives paying for.”

Homesafe provides eligible homeowners aged 60 and over with a lump sum in return for an agreed share of the property’s future sale price. The homeowner remains the legal owner and continues to live in the home.

The arrangement is not a loan or reverse mortgage and does not require repayments. However, because the provider’s share is calculated as a percentage of the eventual sale price, the amount paid to it will increase if the property rises in value.

Customers must obtain independent legal advice before signing an agreement.

The Reserve Bank said higher interest rates were tightening financial conditions and weighing on household consumption and housing activity.

For older borrowers, the impact will depend on factors including the size of their loan, whether their mortgage is fixed or variable, their income and how close they are to retirement.

The rate increase has also reinforced the importance of reviewing mortgage commitments alongside superannuation, savings and expected Age Pension entitlements before leaving the workforce.

Reserve Bank of Australia data confirms the November cash rate decision.