Aged care finance

What is the Best Way to Fund Your Aged Care Costs?

FREE guide from Seniors First. Downloaded by thousands of Australians since its introduction in 2008.

Traditionally people have often sold their family homes to pay for entry fees (what were known as ‘Accommodation Bonds). But with the government’s current emphasis on a ‘user pays’ system, retaining their homes and using aged care finance (such as a Reverse Mortgage) is an increasingly attractive option.

In July 2014, the Living Better Living Longer reforms came into force. People moving into aged care are now required to pay one of the following as an ‘entry fee’ for aged accommodation:

Refundable Accommodation Deposit (RAD)
Daily Accommodation Payment (DAP)

The ‘RAD’ is an upfront lump sum payment to a nursing home. The fee is set by the facility, and although the current average payment amount could range from is $300,000 to $400,000, it can be much higher in some areas.

In addition, a new ‘Means-Tested Daily Fee’ has been introduced which may add significantly to your overall care costs if the house is sold. Using a Reverse Mortgage to fund or part-fund your aged care accommodation is now a viable alternative for you.

How Does Aged Care Finance Work?

Looking into the fees and charges associated with aged care finance can be quite confusing. It is beneficial to take professional help before deciding on your aged care finance. Seniors First has some valuable resources and access to a number of lenders who can provide Reverse Mortgages to pay for aged care following the guidelines set by the Government. This allows the borrower to release up to 45% of the home value (depending on the age of the borrower) with no requirement for regular monthly repayment - the interest is capitalised each month onto the loan balance.

The amount borrowed, plus any accumulated interest (including compound interest) and fees are then repaid when the property is eventually sold.

So, for pensioners and retirees who have a limited income, Reverse Mortgages are the preferred method for aged care finance. In some cases, where self-funded retirees have enough income to service a conventional mortgage, Seniors First will recommend a home or investment loan to finance aged care & accommodation.

A Reverse Mortgage loan may be a good solution for aged care finance if:

the family wants to retain the home for emotional reasons
a spouse or family member is still living in the home and a sale is not possible
the resident wants to keep the option of ‘moving back home’
it is a poor property market and a bad time to sell the home
your financial planner recommends this as a strategy to minimise your costs or improve your cash-flow

What Our Clients Say...

Robert K.

3 weeks ago

Seema was extremely helpful and explain the process with us every step of the way.
Anyone thinking of a Reverse Mortgage to use Seema from Seniors First would find it advantageous to do.

Paul V.

3 weeks ago

Thank you Seema

Bruce C.

3 weeks ago

Hi Angela

Thank you for all the help that you provided in this matter.

Your service was exemplary. You guided us in what could be a complicated and stressful process at our stage of life. Your assistance relieved us of those pressures.

We would recommend your service to anybody.

Thank you

Bruce & Judith

Colin B.

3 weeks ago

totally friendly and helpful through the whole process, thank you Angela

Karen J.

3 weeks ago

What initially felt like a daunting process, was made seamless and easy. My broker Palka ensured that I was well informed at every step of the application process and was always readily available to respond to my questions. I feel excited to be able to move forward with my plans now.

Lesley W.

3 months ago

We were very happy with the speedy and professional service from Seniors First. They helped us navigate all the options available and sorted out the paper work, making it a simple operation to find and apply for the most suitable reverse mortgage for our needs. Highly recommend!

David B.

3 months ago

I was very happy with Seniors First to organize my affairs. Seema was a nice person to deal with and great at getting my application approved, she persisted with my lack of Technology and sending documents. Her experience and knowledge will guarantee success.

barry T.

3 months ago

Understanding, deciding, facilitating and processing an application for a reverse mortgage is not a simple process, however having a Broker who works closely with you step by step is an absolute must have. We choose Seniors First based on peer and industry reviews coupled with the explanatory telecasts they provided explaining what was involved. Having decided to explore further we linked up with our Broker, Angela Giokaris via a lengthy phone discussion. Throughout the following weeks as the application process progressed we were confident that we were in good hands. Angela remained in contact every step of the way, openly ensuring we understood the pros and cons of a reverse mortgage and facilitated every step of the journey. Importantly, there were a couple of conditions from Heartland, our chosen bank, that we had issues with. Angela negotiated with Heartland on our behalf and secured the conditions we were chasing. We found Angela to be highly professional, very knowledgeable of the reverse mortgage product and banking generally. Importantly also, friendly, patient, considerate of our needs, thorough in detail and overall an absolute pleasure to work with. We are very happy with the end result and being able to convert our asset value to a cash value and opening the door to the rest of our lives. We would wholeheartedly recommend Seniors First, and in particular Angela to anyone who is considering going down this track. Barry.

Bobby Y.

3 months ago

I found the consultant from Senior first Richard Chapman, was extremely helpful and also very knowledgeable regarding reverse mortgages. He was always available to assist with any of out questions and or concerns. We found this process very smooth and seamless. My wife and I had many questions during this process, which were always handled with patience and understanding. I would recommend Senior First for anyone thinking about a reverse mortgage they make it easy.
Thanks guys.
Bobby Yarbrough

Ray and Carolyn D.

6 months ago

We were/are clients of Palka Kumar. We were impressed with her friendly nature and boundless knowledge of the industry. We had a number of Tele-conferences with her as she guided us through the process and let us know from the outset that she was with us the whole way through to conclusion. Palka was always available to answer any questions and kept us informed as the process went through the various stages. We have nothing but praise and appreciation for Palkas commitment to her clients. She always made us feel assured and relaxed about a sometimes daunting process. Outstanding.

How Seniors First Reverse Mortgage Can Help

Senior First can help you to find out how much equity you have in your home, and how you might be able to use it for your needs.

If you want to learn about reverse mortgages in detail, you can download our guide, Reverse Mortgage Secrets.

Get In Touch

Industry Awards & Recognition

Senior's First has developed a reputation as an award-winning Reverse Mortgage broker, and a trusted name among public policy organisations, the aged care industry, senior’s groups, older borrowers and their families.