MORE than one in four Gen Y’s would borrow against their house in order to start a new business venture, according to a new study of Australia’s mortgage market.
Insurer QBE’s annual *LMI Barometer shows 25 per cent of Australians aged under 31 were likely to borrow against their property in the future.
This entrepreneurial spirit dissolves with age as only 19 per cent of Gen X (32-46 years) and Baby Boomers (47-66) will adopt this strategy, while understandably, there were no Pre-Boomers (67 years and older) who had an appetite for risk and planned to “bet the house” on a new business.
According to the research, borrowing against residential property to fun business ventures was not commonplace, with only 11 per cent of Australians saying they hade done so in the past.
Of the minority who have leveraged residential property to fund a new business, respondents from Queensland are the most likely to have done so, with those from NSW the least likely.
Future appetite for this type of borrowing is subdued, with one in five saying they were “somewhat” (13 per cent of respondents) or “very” (seven per cent of respondents) likely to borrow against their house for a business.