Benefits of a reverse mortgage
Own and live in your home for as long as you choose.
Alleviate financial pressures and stress.
More choices about what you do in retirement.
Improved lifestyle and sense of wellbeing.
May be able to retire earlier than first thought.
Independent living at home for longer.
Ability to fund and choose in-home care and services.
Pay for aged care without having to sell the family home.
Stay connected to neighbours and community.
Continue to benefit from capital growth on your property.
Control of your retirement finances and planning.
Maximum flexibility so you can change your mind at any time.
Things you need to be aware of
The amount of home equity you have will reduce over time.
Interest is added to the loan balance and compounded over time, meaning you pay interest on your interest, plus you will pay interest on any fees and charges added to the loan balance.
Over time, the amount you owe the lender will increase and the longer you have the loan, the more the interest compounds and the bigger the amount you (or your estate) will have to repay.
You must remain living in the home, ensure the council rates are paid each year, keep it insured and well maintained.
Some reverse mortgage lenders will not lend outside major cities and regional centres while others will consider residential properties in rural areas including vacant land.
Some loans are not applicable to apartments and units or bigger properties (e.g. two hectares and over).
If the value of your home does not rise, or it falls in value, you will have less money for your future needs, like aged care or medical treatment.
Unspent lump sum payments may affect your eligibility for the Age Pension and other Centrelink benefits.