There are a number of reasons a borrower may consider refinancing a reverse mortgage.

The first is to borrow more to meet additional individual needs. The appreciation in property over the past 10 years has seen the value of the median house price double in that period. For example, a home valued at $300,000 in 2006 may now be worth around $550-600,000.

A borrower aged 70 in 2006 may have accessed up to 25% of the value in the home. Depending upon the current loan outstanding, based upon how much was initially accessed and what progressive draw downs have been taken, a borrower can now access up to 35% of the latest valuation.

Interest rates are always important when considering home loans. The interest rates for a number of reverse mortgages taken out in the late 2000’s have not fallen to the level of some current products.

It would be important to consider the benefit of lower interest costs against the actual cost of refinancing.

Loan features are also important. Some reverse mortgages allow residential investments or beach houses as suitable security. It may be possible to refinance to a non-occupied security and use the debt to offset the assessed value for age pension considerations.

It is important to realise we are at the low end of the interest rate cycle and sometime in the future interest rates are sure to increase. Unlike forward mortgages, reverse mortgages are only available with variable interest rates.

Importantly, in September 2012, Stage 2 of the National Consumer Credit Protection Act gave reverse mortgage borrowers more protections than any other type of home loan borrower. The additional regulations ensure borrowers can have greater confidence in their borrowing considerations.