The usage and understanding of Australian household mortgages

Purpose – The purpose of this paper is to establish the profile of mortgage‐holding households in terms of their demographic, socioeconomic, and financial characteristics and assess the current state of knowledge concerning mortgage products in Australia.Design/methodology/approach – Logit models predict owner‐occupied, investor mortgages, and mortgage understanding. Factors include financial literacy, gender, age, ethnicity, occupation, education, family structure, household income, savings, and debt. Understanding is knowledge of mortgage rates, fees and charges, and familiarity with mortgage terms.Findings – Middle‐aged and couples with children have an increased likelihood of an owner‐occupied mortgage, while being from a non‐English speaking background, a small business owner, or a skilled tradesman increases the likelihood of an investor mortgage. Understanding is generally poorer for females, rural/regional households and the young, and better for professionals, the university‐educated, and small b...