ME research shows under-30s are clueless about home loans

19 June 2015

New research carried out by ME (previously ME Bank), has found the vast majority of under-30s have a poor understanding of the mortgage market. The research found only 15 per cent of young adults said they were “confident” they knew enough to find the right home loan for their situation.

However, figures for adult Australians in general showed only 41 per cent responded that they were confident in their grasp of the mortgage market. Commenting on the findings, Patrick Nolan, ME head of home loans, said “Financial literacy is valuable asset and one of the biggest money savers over time – it pays to be informed.” In general, respondents found the cash rate confusing with many unable to state the current rate of 2 per cent.

Given buying a house is the biggest investment most people will ever make, Mr Nolan urged potential borrowers to do their research before they approach the bank. This is another example of research provided by mutuals helping consumers learn more about important personal financial issues.

Some other findings of the ME research (a BCCM member) were:

• 55 per cent had no understanding of an offset facility
• 40 per cent had no understanding of a redraw facility
• 38 per cent had no understanding of interest only repayments
• 26 per cent had no understanding of extra repayments