As the debate and discussion surrounding Australia’s aging population and the need for sufficient retirement income continues, many seniors are left wondering what their options are.
The options, of course, vary greatly from person to person, but many Australians will be exploring the ways to use their largest asset – their home – in order to obtain financial security. There is a common misconception amongst seniors that their only option is to sell their family home and move into smaller lodgings. An increasing number of seniors, however, are taking out a reverse mortgage in Australia that allows them to release their equity in their home while retaining ownership.
Our team of specialist and accredited advisers has made Reverse Mortgage Finance Solutions the nation’s leading experts in retirement income. For those seniors who are deciding between downsizing and unlocking their home equity through a reverse mortgage in Australia, the choice can become significantly clearer when we look at the options in more detail. What is best for you will depend on your individual circumstances, but we can provide some useful information and offer important general advice.
Statistics
Listed below are some housing statistics to give the options some national context:
- The over 65 share of the population in Australia is predicted to rise from 13 per cent to 23 per cent by 2050
- Of those Australians over 65, nearly 80 per cent own their own homes
- Of Australian homeowners over 70 who live alone, roughly 60 per cent reside in houses with three or more bedrooms
- Under existing laws, a senior who downsizes can lose their pension, in part or in full.
Costs
Whether you choose to downsize your home or secure a reverse mortgage in Australia, there are expenses involved and these should be an important consideration. The difference between the value of an existing property and the price of a new downsize might, at first. seem appealing, but the associated costs can quickly add up and make it a far less attractive proposition. These expenses include taxes, real estate fees and relocation costs that all eat away at your profits (and retirement income). The cost of a reverse mortgage is extremely competitive when you take the various expenses of downsizing into account and some careful calculations should be carried out during the decision making process to determine how economically viable each option is.
The question of whether to downsize or secure a reverse mortgage in Australia is not one to be taken lightly and there is more to take into account then statistics and costs alone. In our next blog, we will detail further considerations that will help you make a decision that best applies to your financial state and your lifestyle.