Over the past 20 years, owning your home outright has gone from being the norm to being almost less likely than renting.

Australians are taking longer to save for a deposit, meaning most won’t repay their loan until later in life.

The standard mortgage 20 years ago – was 25 years. More people are now likely to be looking at a 30-year mortgage. A sizeable number of these loans are interest only, with the homeowner seeking to pay down the debt upon retirement, using available superannuation funds.

A recent crackdown on interest-only mortgages, however, forces more home buyers to start paying off the principal on their loans.

According to economist Richard Holden, at its peak, last year, about 40 per cent of all new loans issued by banks were interest only loans.

“They’ve lent too much, people have been encouraged to borrow too much. That leads to a very risky situation.

There’s a real risk of some kind of US-Style meltdown”.

Two years ago, property owner Lynne Wishart was given an interest-only loan to buy a home for a family member. This loan is soon to switch to principal and interest payments.

“We live from pay to pay”, says Wishart. “And if there were any change whatsoever, we just couldn’t do it. We would have to sell”.

Ms Wishart’s loan is with the Bank of Melbourne – a subsidiary of Westpac. Westpac’s lending practices are now under scrutiny in court.

The Australian Securities and Investment Commission (ASIC) has accused the bank of irresponsible lending. Now Ms Wishart is questioning whether the bank should ever have given her a loan.

The Great Australian Dream of home ownership is becoming a nightmare.

If you or someone you know is looking for a current fuss-free way to eliminate a mortgage and not remain a statistic, contact our office today.