Love your home but need funds? Downsizing may not be your best and only option
We understand just how important your family home is to you and how hard you have worked to own (or mostly own) it.
So much more than bricks and mortar, homes are full of memories and are a safe, welcoming place for our families to come back to.
Our connection with our homes is just as strong, if not stronger, as we age with the vast majority of retirees (83%) wanting to grow old at home.
We’re also likely to be very connected to our communities and neighbourhoods and value the familiarity and friendships they bring.
But when finances are suffering and there are tough choices to be made about the future and our need for care, we’re often asked to consider selling our homes to access those much-needed funds.
There are several significant factors to consider and most likely, other options available to you.
Cost of downsizing
There is a significant financial cost to selling a home, not to mention an emotional one. While selling the family home is exempt from capital gains, the lump sum of cash you receive from the sale can impact on and significantly reduce the amount of Age Pension you receive.
Other costs also need to be taken into account when making a decision including selling costs, ranging from real estate fees and conveyancing, moving and buying costs to stamp duty. This can easily ramp up to $100,000 or more for an average Australian home.
Alternative to downsizing
Equity release can provide a legitimate alternative to downsizing, allowing you to achieve the things you need to in retirement, while still remaining in your home for as long as you choose.
- Access top up income
- Lump sum funds for large purchases or life events
- Refinancing or paying down debt
- Cash reserve (line of credit) for rainy day funds
- Medical expenses
- Aged care funding
- Gifting and assistance for family