Reverse Mortgage Trends: Divorced Women & Debt Consolidation

By Darren Moffatt

January 23, 2024


reverse mortgage interest rates

Despite significant social and economic advancements in recent decades that have improved the financial living standards of divorced women, many continue to face financial struggles.

For instance, in Australia, divorced mothers possess 68% less superannuation compared to their married counterparts, highlighting a stark financial disparity. They frequently grapple with immediate shifts in income, unstable housing, legal expenses, and a wait for property settlements, all of which exacerbate their financial difficulties.

Furthermore, it is observed that women typically require an average of five years to regain financial stability post-divorce. However, the repercussions can extend further, adversely affecting their savings and superannuation for a more extended period.

Owing to these financial challenges, some divorced women incur significant debts and struggle to meet essential payments, including bills and mortgages.

Consider the case of one of our clients, Heidi*, who sought assistance from Seniors First for a Reverse Mortgage. This step was taken as a means to consolidate her debts and refinance her home.

Heidi’s Case Study

Heidi, who is on a disability pension, is currently facing financial challenges with various debts. Her property is valued at $1,300,000, which stands against a home loan debt of $125,000. 

In addition to her mortgage, she has accumulated consumer debt amounting to $10,000, which includes obligations from credit cards, Zip Pay, and Afterpay. This financial situation presents a significant burden for her, especially considering her limited income from the disability pension.

She informed her mortgage lender that she was unable to continue making payments.

In response, the lender agreed to suspend her mortgage payments for three months, providing her with time to arrange a refinance.

Heidi was aware that she couldn’t afford to restart the payments and would be compelled to sell her house to settle the mortgage unless she found a solution.

She was reluctant to sell and move due to the expenses involved in downsizing. Furthermore, she was content and well-integrated in her community and did not wish to leave. Additionally, she was concerned that her disability pension might not suffice to meet her ongoing living expenses.

Through Seniors First, she was able to apply for a Reverse Mortgage loan facility of $247,000 comprising: 

  • a lump sum of $141,000 to refinance all home loan and consumer debts
  • an additional ‘cash reserve’ of $106,000 (available, but undrawn funds) for future use

Heidi was able to stay in her cherished home for the long term. Seniors First refinanced her home loan and consumer debts, alleviating the financial pressure of monthly repayments. With the cash reserve she was able to supplement her income for the next 8-10 years, and fund other projects she wanted to do such as minor home renovations, a new car, and dental work.

The Reverse Mortgage loan solved her immediate financial problems, but also improved her quality of life by reducing the stress and worry she was experiencing.

Want to learn more about Reverse Mortgage? Find out more about how to use a Reverse Mortgage for debt consolidation or download your FREE REVERSE MORTGAGE GUIDE

Ready to Apply? You can now check your eligibility online or call Seniors First on 1300 745 745. 

*Name has been changed to protect the privacy of Seniors First customers. 

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before you make any decision.

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