A reverse mortgage allows Australian homeowners aged 60+ to access the equity in their home through a loan facility that doesn't require repayment until you vacate the property.

The amount you can borrow is a function of your age and the value of your home. The older you are, the more you can borrow. The Loan to Value ratio – otherwise known as the LVR – increases by 1% for each year older than 60.

As a guide, if you're aged 60, the maximum amount you can borrow is 20% of the value of your home. If you are 75, the maximum amount you could borrow is 35%.

A reverse mortgage provides funding to meet a range of needs in retirement. It can be used to improve your retirement lifestyle, meet a range of expenses or modify your home to make it safe and comfortable.

The key benefit of a reverse mortgage is to improve your long-term retirement funding. This enables you to:

• Access regular income, a lump sum payment – or both
• Establish a contingency fund to meet your future needs
• Improve your retirement lifestyle
• Remain living in the home you love
• Take control of retirement and have confidence in your future

Most importantly, a reverse mortgage allows you to enjoy the retirement you’ve worked so hard for.

What is a Reverse Mortgage loan? A Reverse Mortgage loan is our innovative approach to borrowing against home equity for responsible, long-term retirement funding. It is a type of reverse mortgage that allows you to borrow money using the equity in your home as collateral. Interest is charged like any other loan, but you don’t need to make regular repayments while you live in your home.

The loan must be repaid in full when you sell or leave your home or, in most cases, if you move into residential aged care. 

To find out more about reverse mortgages, including a reverse mortgage calculator to help you work out how much equity you may have in the future, visit the Australian Securities and Investments Commission’s free consumer website at www.moneysmart.gov.au.

Our customers have approached us with a diverse range of needs and most use the money they release with a reverse mortgage for two or more purposes. These include:

• Establishing a regular fortnightly or monthly income stream
• Refinancing an existing mortgage or paying other debt
• Renovating or modifying their home to ensure it’s retirement ready
• Covering medical or dental expenses
• Buying a new car
• Helping children or grandchildren buy their first home
• Funding in-home care or the transition to residential aged care

We find many of our customers simply like the security that comes from having a contingency fund to meet their future needs.

Reverse mortgages are governed by the National Consumer Credit Protection Act 2009. These protections apply to all reverse mortgages. These protections include:

1. You remain the owner of your home and the title remains in your name. This gives you 100% exposure to any growth (or loss) in the value of your property, into the future.
2. You have guaranteed lifetime occupancy. You cannot be removed from your home by the lender, nor be forced to sell your home at any time against your will, as long as you have met your obligations under the loan, as specified in the terms and conditions of the loan contract. These include the responsibility to remain living in your home, to ensure the council rates are paid, to keep it insured and to keep it well maintained.
3. You cannot end up owing more than the house is worth. The “no negative equity guarantee” (NNEG) clause, introduced in 2012, means you are protected by law and cannot owe more than your home is worth, irrespective of the value of the property at the end of the loan term.