The other online searches that we were interested to look up online last year includes:
- Australian Open
- World Cup
- Shane Warne
- Ukraine
- Novak Djokovic
- The Ashes
- Ash Barty
- Olivia Newton-John
- Betty White
But among aussie homeowners, queries about reverse mortgages are now in the radar.
Based on a report published by Great Southern Bank, “what is a reverse mortgage?” makes it to the list of top home ownership questions in 2022.
This signifies that more and more Australian mortgage holders are becoming aware of Reverse Mortgages as a viable financial product that might help people navigate the changing economic environment.
The analysis also reported that the two top home ownership queries – “interest rate rise” and “RBA cash rate” increased significantly with +750% and +500% year-on-year (YoY) growth respectively.
But Aussies are more keen to use online calculators with ‘borrowing capacity calculator’ increasing to more than +5000% YoY growth.
So, What is a Reverse Mortgage?
If you are interested to know more about Reverse Mortgages, you don’t need to open a new tab and use Google because here’s a definitive answer from Seniors First:
Reverse Mortgages are loans for pensioners and retirees designed specifically for older borrowers who are typical ‘asset rich’ but ‘cash poor’.
Known variously as ‘senior’s loans’, ‘reverse home loans’, and ‘senior’s finance’, Reverse Mortgages are the most popular form of home equity release in Australia.
Reverse Mortgages allow people from the age of 60 to convert the equity in their property into cash for any worthwhile purpose. No income is required to qualify.
Although interest is charged like any loan, the borrower is not required to make repayments (although they can usually make voluntary payments if they wish).
How Does a Reverse Mortgage Work?
As with standard home loans, a Reverse Mortgage is secured by the first registered mortgage over the borrower’s house.
The amount of equity that you can release is determined by your age and the security property’s value (although lenders have different policies on how much they will lend).
Crucially, however, you will retain full ownership and can stay in your home as long as you want.
The interest is ‘capitalised’ -charged back to the loan account – and will compound over time, i.e., the loan balance will increase unless you make voluntary payments.
The debt, including all interest and fees owed, is repaid to the lender when:
- You sell the property of your own accord, OR
- You move into aged care (not required with some lenders), OR
- The last surviving borrower dies (if you are a couple
Reverse Mortgage Free Guide
For a more in-depth look into Reverse Mortgages, download this FREE EBOOK from Seniors First.
Or if you want to speak to a Reverse Mortgage advisor, you may call us on 1300 745 745.
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