Bank suggests Australians to ditch home loan debt and live life

Jimi Swagger

I say whatever I think should be said
Jan 25, 2015
Turtle Island to DXB
Creepy business model. But I know people with tiny homes who have a similar mentality. To enjoy life and not go into huge debt.

In what has to be one of the weirdest marketing campaigns I’ve come across in my almost 30 years of banking and finance, NAB subsidiary UBank has today launched a campaign titled “Real estate tips from the terminally ill”.

Lee Hatton, UBank CEO, said the campaign is an effort to encourage Australians “to borrow less and live more”.

The campaign, and the short film that accompanies it, talks to 6 Australians living with terminal illness and how that diagnosis impacted on their views of what is important in life.

“Our hope is that after you watch the film you will consider reviewing your own approach to spending your money on the things that are most important to you,” Hatton said.

“Are you spending enough time with family and friends? Are you pursuing what you’re truly passionate about? Are there changes you need to make to find more time for your priorities?”

And it appears Australians need to take Hutton’s advice, according to research released to coincide with the campaign today.

“The research uncovered some quite concerning 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,” Hatton said.

Some key findings included:

  • More than half (56%) of mortgage holders skip spending time with family in order to work more to pay the mortgage;
  • More than one in two home owners (54%) have foregone a family holiday because of financial pressures;
  • 50% of home owners are seeing repayments take a toll on their social life, declining at least two social outings a month; and
  • Nearly two thirds (59%) of respondents have cut a holiday short due to mortgage payment considerations.
It all adds up to financial stress, Hatton said, adding “worrying about your mortgage isn’t what life should be about. If we could all borrow less and live more, there’s no doubt our happiness and well-being would be better off.”

It’s both true and a noble sentiment.

But it’s Australian household’s love affair with debt and property which has driven the profitability of Australia’s big banks and driven property prices to the levels that now leave many in the big cities with a house, a mortgage, and the very problems Hatton and UBank are talking about.

As with the federal government’s claim it doesn’t need to adjust negative gearing or capital gains to address the affordability crisis – because supply is what is needed to balance out the market – the unstated impact of UBank’s idea is that property either must stop rising, or fall.

The big question for Australians is whether they are happy with that trade-off for lifestyle.