Reverse Mortgage

A reverse mortgage is currently the most common equity release product for seniors in Australia.  With a reverse mortgage, you can use the equity in your home to borrow money for a variety of purposes or to suppliment  your current pension payments.  You can take the loan as a lump sum, in a regular income stream, as a line of credit, or as a combination of these drawdown options. Regular principle repayments are optional as the interest capitalises with the debt being repaid upon the death of the borrower (or last surviving borrower in the case of a joint application).

Minimum age and maximum loan amounts vary amongst the handful of Lenders who offer these products and both legal and financial advice is recommended in order to understand the nature of interest capitalisation and the effect this has against the equity in your home, as well as any effect a regular loan drawdown may have on the level of any existing pension entitlements.

To see how the capitalisation of interest may affect the equity in your home, please refer to our Reverse Mortgage Calculator or receive a call back from Puzzle Finance

Home Reversion Schemes

These are relatively new in Australia.  They are currently only available if you are aged 60 or over and live in certain areas in Sydney or Melbourne.  With a Home Reversion Scheme, you sell a proportion of equity in your home while you still live there.  You receive a lump sum payment in exchange for a fixed proportion of the future value of your home.