UBank urges Australians not to take on loans they can't afford

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Nov 8, 2016

UBank urges Australians not to take on loans they can't afford

In a somewhat unorthodox marketing campaign, UBank is asking Australians only to borrow what they can comfortably afford to repay.

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UBank has released research revealing the extreme measures some home owners are prepared to take to meet excessive mortgage payments.

The UBank, an online only bank, aims to start a national conversation to redefine the Australian dream, as research shows that many Australians are chasing a ‘dream’ that is actually financially beyond their reach.

The survey asked Australians with mortgages how comfortable they are with their financial situation, and whether their mortgage is causing financial stress.

According to the research, 50% of home owners say meeting repayments is taking a toll on their social life as they decline at least two social events a month.

More than half (56%) of mortgage holders said they miss time with family so they can work more in order to pay the mortgage.

The research also indicates that some homeowners could be living in smaller homes, with 85% of Australian mortgage holders having at least one unused room in their house. Of those, nearly two thirds (58%) said they could manage without the extra space

UBank CEO, Lee Hatton, "The research uncovered some quite alarming results, with the key takeout being that Australians are working too hard to pay off mortgages they can only just afford and subsequently not living comfortably."

"One in four Australians admit they are financially stretched in relation to meeting their mortgages and as a result, they’re sacrificing their personal and social lives," she said.

"UBank want Australians to borrow less and live more in order to find balance and ensure they’re happy and not crippled by financial stress," said Hatton.

"We encourage Australians to choose houses that are in reach financially so they can live fulfilling and happy lives without undue financial stress.”

"What we are seeing are people buying houses or ‘the dream’ which is too big for their needs," said Hatton.

The research follows the October release of UBank's film 'Real Estate Tips from the Terminally Ill'. Visit the site to view the film, and find out more about UBank's campaign to encourage Australians to borrow responsibly.