Ms Thompsons and Mr Wade are in their 80s and they have an existing Reverse Mortgage of $740,000 to a lender that does not do loan increases. Over the 20 years of their retirement, they have used the Reverse Mortgage to renovate the home and travel extensively. Even after a health scare for Mr Wade last year, both are still very fit and have no other beneficiaries except each other and some charities.
They want to replace their aging car as it has become expensive to maintain, do some more travel around Northern Australia, and replace their old kitchen appliances.
Their property has increased in value from $1.6million in early 2018 to around $2.8million.
The combination of their increase in age and property value has provided a solution to refinance to another bank and get a facility limit of $1,092,000 which will give them another $350,000 to spend on the new car, travel, and paying for general living expenses. This will allow the couple to keep up with rising living costs and continue to live an active and enjoyable lifestyle.
(Names and details of this scenarios have been changed to protect the clients identity.)