A reverse mortgage is a finance facility specifically designed for senior Australians to help them access the equity tied up in their homes. Funds borrowed against this equity can be used for any purpose to help seniors enjoy a better quality of life.

Reverse mortgages have become an important retirement planning solution allowing seniors a flexible way to finance important projects without being forced to sell the family home or worry about making regular monthly repayments to the lender.

You could be eligible for a reverse mortgage loan approval if you are:

Over 55 years of age

Own your home (or have a small loan balance which can be paid out by the new
    reverse mortgage loan)

Your property is acceptable security for the lender

Funds can be taken in the form of a cash lump sum, monthly income, a cash reserve fund or a combination of all these methods.

The lender will register a mortgage over the property and hold the title as security in the normal manner. Income is not assessed and monthly repayments during the life of the loan are not required from seniors but may be made voluntarily. Generally, but not always, the outstanding loan balance, including accrued interest and fees, is repaid when the house is sold or passes to the estate of the last surviving borrower.

Under a conventional mortgage, you borrow funds from a lender to purchase a property, then make regular “principal and interest” repayments to the lender. Over time, the balance reduces and eventually you repay the loan in full and own the property outright.

With a reverse mortgage, the process operates in reverse. Seniors generally own their property outright to begin with and a lender advances you funds for your personal use. As you are not required to make any repayments, interest and fees are added to the loan balance each month, so the loan balance increases over time. The loan is paid out when the property is sold or refinanced by beneficiaries.

What is a Reverse Mortgage?

How does a Reverse Mortgage differ from a conventional mortgage?

How much can I borrow?

What steps are involved in arranging a Reverse Mortgage?

What are the key eligibility criteria for a Reverse Mortgage?

Will I still continue to own my property?

What can Reverse Mortgage funds be used for?

What are the advantages and disadvantages of Reverse Mortgages?

Product features and loan conditions

What is the minimum Reverse Mortgage loan amount?

Must I live in the property which is security for the loan?

Are all types of property acceptable as loan security?

Must I give my property title to the lender?

Who should own the property and who should be the borrower?

Can I arrange a Reverse Mortgage loan if my home is already mortgaged to another lender?

What is an Equity Protection Option?

What is a No Negative Equity Guarantee?

Is there a specific Reverse Mortgage loan term?

How can I take the Reverse Mortgage funds?

Do I have to make regular monthly repayments?

Does the loan balance increase?

Can I make voluntary lump sum partial repayments?

Can I remain in my home indefinitely

Can I move to another home and still keep my loan?

Can I borrow more later on?

Do I need to insure and maintain the property?

Who benefits from increases in the property's value?

Can I estimate the future loan balance and remaining equity in my home?

When does the loan have to be fully repaid?

Are there any penalties for fully repaying the loan early?

What happens if I need to move into permanent Aged Care?

When I die, do my children have to sell my home and repay the loan?

Other important considerations

What specialist advice should I receive?

Will a Reverse Mortgage affect family inheritance?

Should I consider other alternative solutions?

What safeguards should I look for?

Are Reverse Mortgage funds taxable in the hands of the borrower?

Interest rates / Establishment fees / Possible future charges

Do I have a choice between variable and fixed rates?

What fees and charges are payable to establish the loan?

What other possible fees may be payable?