A quarter of Aussies expect to still owe money when they die, including mortgage and personal debt. (Source: AAP/Getty)
The amount of debt that Australian households are taking on has steadily increased as people borrow bigger home loans and turn to products such as personal loans and credit cards. It means millions of Aussies now fear they will still be in debt when they die.
A quarter of Australians, or around 5.6 million people, expect to still owe money when they pass away, exclusive new research by Finder has revealed. That includes 12 per cent who expect to be carrying mortgage debt, 11 per cent with personal debt like a credit card or loan, 8 per cent with government debt like unpaid HECS, and 4 per cent with unpaid fines.
Finder money expert Rebecca Pike told Yahoo Finance financial freedom was slipping “further out of reach” for some Aussies, with people realising they may never be debt-free even as they plan for retirement.
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“The idea that you could spend your whole life working hard and still owe money when you die is confronting — but it’s becoming the new reality for millions of Australians,” Pike said.
The survey of 1,011 people found more women (30 per cent) than men (22 per cent) expected to die still in debt. Pike said this reflected the ongoing gender gap in pay, super and financial security.
It’s a stark increase from the one in 10 Australians who believed they would be saddled with debt until they died when Finder surveyed people back in 2015.
“We’re seeing a growing acceptance that debt is just part of life — but that mindset can trap people into working longer and saving less for the future,” she added.
Nearly two in five (38 per cent) of those surveyed said they were confident they would have all their debt paid by then, while 36 per cent said they were already debt-free.
The average Australian household carried $313,633 in total debt in June 2025, Finder’s analysis of ABS data found. The majority came from home loans.
The latest HILDA survey found more people were retiring with mortgage debt, rising from 13 per cent in 2003 to 17 per cent in 2023. This may be due to people buying their first home later in life and borrowing larger amounts due to rising house prices.
Any debts that you owe when you die will need to be paid from the assets of your estate.
“When someone dies with debt in Australia, that debt doesn’t just disappear. It’s usually paid out of their estate before any inheritance is passed on — which can leave loved ones with far less than expected,” Pike told Yahoo Finance.
With a mortgage, it will generally be transferred to any co-owner, your estate, or your beneficiary as outlined in your will.
They may opt to sell the property to pay off the mortgage, continue to own the property and repay the mortgage, or sell other assets in the estate to pay off the mortgage.
With HECS debt, any outstanding amount that remains after your death is cancelled. However, you’ll still need to repay any compulsory amounts that were owed up until the day you passed away.
Pike encouraged Aussies to make a plan to pay down their debt and protect their loved ones against the potential financial fallout.
“Having debt when you die can leave your family dealing with financial stress on top of grief,” she said.
“A clear plan, some savings, and a will can go a long way toward easing that burden.”
There are free services like the National Debt Helpline on 1800 007 007 that can help you manage debt. Their financial counsellors offer free and confidential advice.
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