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Anxious if your savings would be enough to ensure a smooth retired life? Leveraging your home equity could be an option to consider.
Most seniors in Australia are deciding for a reverse mortgage on their property to support a comfortable retirement.
It is a type of home loan mainly designed for retirees and pensioners who are cash poor but asset rich. A reverse mortgage is also known as a senior’s finance or senior’s loan.
It allows you to borrow money using the equity in your property as security. You could take this amount as a regular income stream or lump sum, or a combination of both. Most lenders need the borrower to be 60 years of age or above to qualify.
The benefit of the loan is you can reside in your home without making any repayments. However, over time the interest is compounded and added to the loan balance. The entire balance must be paid to the lender when you move home or breathe one’s last.
As a general rule, the older you are, the more you can borrow. However, based on the choice of lender, this amount varies and typically increases with age. For instance, at the age of 60, you can get up to 15-20 per cent of the property’s total value.
The cost of the reverse mortgage depends on the fees and interest rate. The primary issue is as the interest compounds; the debt will increase quickly. Some of the reverse mortgage products enable you to protect a part of the value of your house.
Note: If you borrow from a lender other than authorized deposit-taking institutions such as a credit union or bank, they are legally bound not to charge more than 48 per cent interest, including all charges.
A reverse mortgage can have a notable impact on your quality of life, relationships and finances upon retirement. It can be helpful to improve your lifestyle or relieve financial stress. However, you have to be informed of the terms that come with the loan and the available options.
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”
Jammaya purchased an investment property in Queensland. She’s taking advantage of our HiLo investor loan product which enables clients to get a 0.75% interest rate on their owner occupier home loan! Many clients are saving thousands per year with this amazing investor-only deal!
Leoni completed a purchase agreement for her first rental property. She secured a fantastic interest rate and her new property is optimised for maximum tax deductions.
“I was offered the rate, checked it with my bank, went into another branch and no one could match it!”