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Keith (aged 74) lives in his in Sydney’s Western Suburbs. He is reliant on the Centrelink aged pension for his income. 

He has a mortgage of approximately $230,000 over the property. He was surviving making the payments comfortably on his pension, but with recent rate increases the monthly payments are now taking most of his pension. 

This has resulted in his savings now being reduced. He is also in arrears on his rates as he tries to save funds to meet the monthly mortgage payments. 

Keith is a retired builder, and he has been renovating his property. The property is overall in good condition structurally but is a little tired. He wants to have some funds to complete the renovation of his bathroom and tidy up his backyard. 

The Reverse Mortgage will repay his current mortgage meaning he does not have to make any monthly repayments. It will also provide funds to complete renovations. Most importantly it will also free up cashflow which will enable him to live comfortably in the future. 

The loan is to reduce cashflow, finish the renovations and other one off or discretionary expenses. The reduced cashflow by refinancing the mortgage to a Reverse Mortgage with no compulsory repayments will help Keith meet his living costs and improve his quality of life. 

If you have anymore questions on how a Reverse Mortgage can help you achieve your lifestyle aspirations, please call our Reverse Mortgage specialist in your state.

Reverse Mortgages often have a reputation for eating up a family’s equity and diminishing your child’s inheritance. This is a concern for clients when taking out a Reverse Mortgage, however, we have found in the current Australian property market when used responsibly, the opposite is true.

We recently heard from a client in the Northern beaches. This couple took out their first Reverse Mortgage in 2007, they have done several refinances since. In 2007 their house was worth $750,000, and they had a choice to either sell and buy in a retirement village for $500,000 or take out a reverse mortgage to supplement living costs. If the had of sold and bought in the retirement village, they would of had $200,000 left to put in the bank after all other fees and charges. Over the next few years, they would have had to lived off the pension and savings. Once the savings had run out, they would have been left to scrimp and save as you cannot get finance on a retirement village property. They would have only been able to leave their children the $500,000 from selling the retirement village property.

Fortunately, the couple chose to do a Reverse Mortgage. The couple have now spent $215,000 on their Reverse Mortgage facility, taking a thousand a month to supplement income and drawing down covering one off large expense. They have accrued interest of $275,000 for a total cost of $490,000. This alone sound expensive, but their property is now worth over 2.5 million dollars, and they have enjoyed a far higher quality of life.

The clients’ children will now go on to inherit over a million dollars each instead of having the split half a million dollars between the two of them.

For more information on how a Reverse Mortgage can help you please call our Reverse Mortgage Specialist in your state.

Mr F (aged 80) and Mrs F (aged 73) live in their unencumbered home in the Sydney Upper North Shore. They have lived there for 34 years.

Mr F was an engineer, he has retired completely now, and Mr & Mrs F receive the full Centrelink aged pension.

Mr and Mrs F have an investment that has been performing badly since Covid started and so an expected income has not materialised from it.

They have a yacht worth around $300,000. They want to be able to keep using the yacht regularly. They have done considerable travelling around Australia and the world and now look forward to using the yacht.

They have one outstanding liability which is a result of Mr F’s accountant making an incorrect claim for Covid assistance. This is being paid off by a $1,000 payment each month for the next 10 months.. This is reducing their available cash flow for living expenses.

The F’s are planning to use their Reverse Mortgage as a credit line to supplement their income so they can maintain their lifestyle and continue using their boat. They will also do some travel around New South Wales and Australia. They are getting a loan facility of $270,000.00 which they will draw down as they need.

They expect the requested loan to last them for their lifetime. The pension pays their necessary living costs. The reverse mortgage funds are more for their discretionary spending such as the boat use and some travel.

This loan has allowed the F’s to continue enjoying their current lifestyle and the results of all their hard work over the last 50 years.

(Client Names, Ages and Locations have been changed to protect our clients confidentiality.)