Refinance Home Loan
Still Paying Off Your Home Loan After 55?
An Over 55s Refinance could help reduce the pressure of monthly mortgage repayments
For many Australians approaching or already in retirement, the home loan hasn’t disappeared. And when interest rates rise, those monthly repayments can take an increasingly large bite out of your income.
If you’re aged 55 or over and have substantial equity in your home, there may be another refinancing option worth considering.
*Eligibility and lending criteria apply
The pressure point
$2,000/mo
compulsory mortgage repayment — every month, before groceries, utilities and living costs
Table of Contents
Over 55s Refinance
Over 55s Refinance is the term we use for refinancing an existing home loan into a later-life lending solution, which may include a Reverse Mortgage.
With an eligible Reverse Mortgage, your existing mortgage can potentially be paid out and regular monthly repayments are generally no longer required.
You still own your home.
And if you want to keep making repayments, you generally can.
The difference
Repayments can usually become optional rather than compulsory.
Could Your Home Loan Be Putting Pressure on Your Retirement?
You may have taken out your mortgage when you were earning a full-time income.
But retirement can change the equation. You might now be:
You may have substantial wealth tied up in your property — but not enough monthly income to comfortably keep servicing a conventional home loan.
An Over 55s Refinance may provide another option.
Instead of selling your home simply to clear the mortgage, eligible homeowners may be able to use some of their home equity to refinance the existing loan.
No fee for an initial consultation • No obligation • Eligibility and lending criteria apply
THE EXPLAINER
What Is an Over 55s Refinance?
An Over 55s Refinance is a way of looking at home-loan refinancing specifically for older homeowners.
Rather than assuming you need another standard mortgage with compulsory principal-and-interest repayments, we look at the different lending options available to people aged 55 and over.
For some borrowers, this may include refinancing the existing mortgage into a Reverse Mortgage.
A Reverse Mortgage is a regulated home loan designed for older homeowners.
With a conventional home loan:
With a Reverse Mortgage:
The loan, including accumulated interest and fees, is generally repaid later when the property is sold or another repayment event occurs under the loan contract.
Eligibility generally starts from around age 55 or 60, depending on the lender and product.
Standard Home Loan vs Over 55s Refinance Using a Reverse Mortgage
The Comparison
-
Standard Home Loan
Reverse Mortgage Refinance
Secured against your home
Yes
Yes
You remain the homeowner
Yes
Yes
Regular repayments usually required
Yes
Generally no
Can you make voluntary repayments?
Yes
Generally yes, subject to lender terms
Interest charged
Yes
Yes
Interest can be added to the balance
Usually no, if paid on time
Yes, to the extent interest is not repaid
Loan balance
Usually reduces when repayments are made
Can increase if interest and fees are capitalised
Typical interest rate
Generally lower
Typically higher than a standard home loan
Loan eventually needs to be repaid
Yes
Yes
Amount available affected by age
Generally no
Yes
Home equity may reduce over time
Usually not if principal is being repaid
Yes, particularly without voluntary repayments
Important
An Over 55s Refinance using a Reverse Mortgage does not make your existing debt disappear. You are refinancing one loan into another loan with a different repayment structure.
The potential benefit is improved monthly cash flow because regular repayments are generally no longer required.
The trade-off is that if you choose not to make repayments, interest and fees can be added to the loan and the amount owing can increase over time.
THE PROCESS
How Could an Over 55s Refinance Work?
A Seniors First specialist looks at your:
An Over 55s Refinance does not automatically mean getting a Reverse Mortgage.
Depending on your circumstances, your options could include:
If a Reverse Mortgage is suitable for your circumstances and you qualify, the new loan can be used to pay out the existing home loan.
The Reverse Mortgage lender would generally take a first mortgage over the property.
Instead of having to find money for the mortgage every month, you can generally choose whether or not to make repayments.
That can potentially free up money for everyday retirement expenses such as:
THE REALITY CHECK
Could Over 55s Refinance Provide Repayment Relief?
Potentially.
But it is important to understand exactly what “repayment relief” means.
It means reducing or removing the requirement to make regular mortgage repayments.
It does not mean:
If you don't make repayments, interest and applicable fees are generally added to the loan balance.
That is why an Over 55s Refinance needs to consider both:
your cash flow today
your likely financial needs later in life.
THE FIT
When Could an Over 55s Refinance Be Worth Exploring?
It may be worth exploring when…
Another option may be better when…
There is no universal answer.
Whether an Over 55s Refinance is appropriate depends on your age, property, mortgage balance, income, objectives and future plans.
That's why Seniors First starts with your circumstances — not with the loan.
THE REALITY CHECK
You Can Still Make Repayments
This is one of the most misunderstood features of Reverse Mortgages.
“No regular repayments required” does not mean “you aren't allowed to repay the loan.”
Many Reverse Mortgage products allow borrowers to make voluntary repayments, subject to the individual lender's terms.
That could mean choosing to:
This can create a useful middle ground.
For example, you may currently have a compulsory mortgage repayment of $2,000 per month.
After an appropriate Over 55s Refinance, you may decide that you still want to contribute towards the loan — but at a level that better suits your retirement cash flow.
You might choose to pay some of the interest each month, make smaller regular payments, or make additional repayments when your budget allows. And if another expense takes priority in a particular month, you may not be required to make a regular repayment.
The amount and frequency of voluntary repayments, and whether repaid amounts can later be accessed again, depend on the individual lender and loan terms.
The Compound Effect
What Happens If I Make No Repayments?
Interest will normally continue to be charged. Instead of paying that interest each month, it is added to the loan.
Future interest may then be calculated on the increased loan balance. This is known as compound interest.
Over a long period, compounding can materially increase the amount you owe and reduce the equity remaining in your property. This is one of the most important considerations with any Reverse Mortgage.
At Seniors First, we believe you should understand the future impact before deciding.
As part of the regulated Reverse Mortgage process, you will be shown projections illustrating how the loan balance and your estimated home equity could change over time.
What Happens to the Loan Later?
Depending on the lender and loan contract, a Reverse Mortgage is generally repaid when a specified repayment event occurs, such as when:
The outstanding loan balance is then repaid, commonly from the proceeds of selling the property.
Until then, you remain the owner of the home, provided you comply with the conditions of your loan.
These commonly include maintaining the property, keeping appropriate insurance in place and paying council rates and other property expenses.
What About My Home Equity?
Your home equity is important.
Using a Reverse Mortgage means borrowing against some of that equity.
If you make no repayments, the increasing loan balance will generally mean that you retain less equity than you otherwise would have.
That can affect:
For that reason
Borrowing only what you reasonably need and considering voluntary repayments can be important.
Important Consumer Protection
No Negative Equity
Australian Reverse Mortgages covered by the National Credit Code include statutory No Negative Equity protection, subject to limited exceptions.
This is designed to protect borrowers from having to repay more than the value of the mortgaged property when it is sold in the circumstances covered by the legislation.
Your broker will explain how this protection applies to any loan you are considering.
Read the Australian Government Reverse Mortgage Information Statement
THE LIMITS
Is an Over 55s Refinance Possible If I Still Owe a Lot?
It depends.
Reverse Mortgage lending limits are generally based on factors including:
Generally, the proportion of the property's value that may be available increases as the borrower gets older.
If the amount available under a Reverse Mortgage is less than your existing mortgage, you may need to contribute the difference or consider another solution.
The easiest first step is to check the numbers.
An Over 55s Refinance Is About Finding the Right Option
Our job isn't simply to help you get a Reverse Mortgage.
It's to help you understand whether changing your current home loan could improve your financial position — and what trade-offs may be involved. Before recommending a loan, a Seniors First broker will consider your individual circumstances, requirements and objectives.
Where relevant, that can include considering alternatives such as:
A conventional refinance
If you have stable income for repayments, a conventional home loan may offer a lower interest rate.
Restructuring your existing loan
Your current lender may have alternative repayment structures or loan options available.
Selling or downsizing
For some people, selling the property and clearing the mortgage is the preferred long-term solution.
Financial hardship assistance
If you are struggling to meet your current repayments, you can also contact your existing lender to discuss available hardship assistance.
Refinancing using a Reverse Mortgage
For homeowners who want to remain in their home but reduce the burden of compulsory mortgage repayments, a Reverse Mortgage may be worth considering.
Why Seniors First
Why Speak With Seniors First About an Over 55s Refinance?
Reverse Mortgage specialists since 2006
Later-life lending is different from ordinary mortgage broking. Seniors First specialises in helping older Australians understand and compare Reverse Mortgage and home-equity lending options.
We can help you:
Compare multiple lenders
Different lenders have different age limits, property rules, lending limits, rates, fees and features.
Understand the trade-offs
We'll explain not just what you could borrow, but what the loan could mean for your home equity over time.
Structure the loan carefully
Borrowing only what you need reduces interest costs, and we can help structure a loan to match your exact goals.
Explore voluntary repayment options
If you want to keep paying some or all of the interest, we'll help you understand how different products handle repayments.
Consider other refinancing options
An Over 55s Refinance does not automatically mean a Reverse Mortgage. Your circumstances and objectives come first.
Navigate the process
From comparing lenders and arranging valuations through to application and settlement, our specialist team helps guide you through each stage.
What our customers say
Rated 4.9 stars on Google with over 600 reviews. Here's what some of our customers have to say about their experience with Seniors First Reverse Mortgage brokers.
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Frequently asked questions
Over 55s Refinance is the term Seniors First uses to describe refinancing options designed for older homeowners who still have an existing mortgage. Depending on your circumstances, this may include refinancing your mortgage using a Reverse Mortgage.
It is not a separate loan product or lender. The actual loan used will depend on your individual circumstances and the options available from relevant lenders.
Potentially, yes.
If you meet lender eligibility and borrowing criteria, Reverse Mortgage proceeds can potentially be used to pay out an existing mortgage.
The amount available needs to be sufficient to discharge the existing loan unless you can fund any shortfall yourself.
Regular repayments are generally not required on a Reverse Mortgage while you continue to satisfy the loan conditions.
Instead, unpaid interest and applicable fees are added to the loan balance.
Generally, yes.
Many Reverse Mortgage products allow voluntary repayments, although conditions differ between lenders.
You may be able to:
- pay interest
- make regular payments
- make occasional lump-sum repayments
- repay the loan in full.
Reducing the outstanding balance can reduce the amount on which future interest is calculated.
The actual impact will depend on the timing and amount of repayments, the interest rate and the lender's loan terms.
Not necessarily.
If your refinance uses a Reverse Mortgage, the interest rate will typically be higher than the rate on a standard home loan.
The main reason someone might consider this type of refinance is therefore not necessarily to obtain a lower interest rate.
It may be to change the repayment structure and reduce pressure on monthly cash flow.
Both the immediate cash-flow benefit and the potential long-term cost need to be considered.
Yes.
A Reverse Mortgage is a mortgage secured against your property. It does not transfer ownership of the property to the lender.
You remain the homeowner, subject to the mortgage and the terms and conditions of your loan.
It can.
If the interest and fees charged are greater than the repayments you choose to make, the outstanding balance will increase.
Because interest can compound, this increase can become significant over longer periods.
Reverse Mortgage borrowing limits usually depend heavily on:
- the age of the youngest borrower
- the value of the property
- property location and type
- lender-specific eligibility criteria.
A specialist can calculate what may be available before you decide whether to proceed.
Borrowing money itself is treated differently from income, but how borrowed funds are used or retained can have implications for Centrelink means testing.
If this is relevant to you, consider obtaining appropriate financial or Centrelink guidance before proceeding.
A Reverse Mortgage does not normally prevent you from selling your home.
The outstanding loan balance would generally need to be repaid as part of the sale.
A Reverse Mortgage can reduce the equity ultimately remaining in your property and therefore may reduce an inheritance.
This is one reason future needs, the amount borrowed and the likely duration of the loan should be carefully considered before proceeding.
Still Paying a Mortgage After 55?
Find out whether an Over 55s Refinance could reduce compulsory monthly repayments — while understanding the costs, risks and long-term impact before you make a decision.
You may have more than one way to refinance.
Important Information
“Over 55s Refinance” is a descriptive term used by Seniors First for refinancing options for older homeowners. It is not the name of a separate credit product. Depending on your circumstances, an Over 55s Refinance may involve a Reverse Mortgage or another form of credit.
This information is general in nature and does not take into account your individual objectives, financial situation or needs. It is not financial advice.
A Reverse Mortgage is a loan secured against your home. Interest, fees and charges apply. If you do not make repayments, interest may be capitalised and the loan balance may increase over time, reducing the equity remaining in your property.
Reverse Mortgage interest rates are typically higher than standard home-loan rates. Eligibility, borrowing limits, rates, fees, features and credit criteria vary between lenders and are subject to change.
Before providing credit assistance, we will make inquiries about your requirements, objectives and financial circumstances and assess whether the proposed credit is suitable. Mortgage brokers are also required to act in the consumer's best interests when providing credit assistance.
You should carefully consider the impact of a Reverse Mortgage on your future needs, including retirement income, future housing, aged-care requirements and estate planning, and obtain appropriate independent professional advice where required.
Please read the Australian Government Reverse Mortgage Information Statement before proceeding.
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.
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Suite 68, 89-97 Jones St Ultimo NSW 2007
Level 8, 90 Collins Street Melbourne VIC 3000
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