A possible solution for those who feel asset-rich but cash-poor
A lot of our members tell us they feel asset-rich but cash-poor.
Australian property prices have risen on average by 69% in a decade*, but that's little comfort to some of us who want to remain in our home but have almost nothing to live off.
That's why the FiftyUp Club has worked with an award-winning finance provider to find a possible solution for members aged 60-plus who want to unlock some of the equity in their home.
Heartland Seniors Finance has been named “Best Reverse Mortgage Provider” by Canstar^ and its product has been awarded “Best Reverse Mortgage” by Money Magazine^^ for seven years in a row.
As a FiftyUp Club member, you can now get an exclusive offer valued at $495 if you take out a reverse mortgage with Heartland. #
You can click here to see the offers details, or call to talk to a Heartland reverse mortgage expert in their Australian-based call centre from 9am-5pm Mon-Fri on 1300 889 338.
We've also created a Calculator that tells you how much you could borrow and some Frequently Asked Questions about Reverse Mortgages at this link.
Here are a few of the most frequent ones:
What is a reverse mortgage?
A reverse mortgage is a type of home loan to people aged 60 or over that allows some of you to access the money tied up in the family home by taking out a loan secured by the property. The loan can usually be taken as a lump sum, a regular income stream, a line of credit or a combination of these options.
A reverse mortgage can enable senior homeowners to release some of the equity trapped in their home, to assist them to enjoy their retirement with independence and dignity, without having to sell the home.
Who is Heartland?
Heartland Seniors Finance is Australia’s largest specialist provider of reverse mortgages. Heartland’s product is flexible, offers considerable customer protection, and is backed up with excellent service.
Heartland has been named “Best Reverse Mortgage Provider” by Canstar and its product awarded “Best Reverse Mortgage” by Money Magazine for seven years in a row.
Heartland has an award-winning product, which provides seniors the financial freedom to spend their retirement how they choose, with independence and dignity. Heartland’s product is flexible, offers considerable customer protection, and is backed up with excellent service.
How and when is my loan repaid?
A reverse mortgage, including accrued interest, is only due to be repaid when you move permanently from your home, when the property is sold or the last nominated borrower moves out of their home or passes away. The loan is usually repaid from the sale proceeds of your property and the balance is then retained by you or your estate. If you are moving into long term care, the loan would need to be repaid unless you are eligible and chose to apply for Heartland’s Aged Care Option for 5 years (terms, conditions, credit criteria and fees apply).
Can I repay the loan early?
Although a reverse mortgage is designed to last for as long as you wish to keep your home, you may usually repay all or part of your reverse mortgage at any time without penalty, providing you with flexibility to manage your finances in the way that suits your needs. However with a reverse mortgage you do not need to make regular repayments.
Can I end up owing more than my home is worth?
No, in 2012 the Government introduced statutory 'negative equity protection' on all new reverse mortgage contracts. This means you cannot end up owing the lender more than your home is worth (the market value or equity).
When the reverse mortgage contract ends and your home is sold, the lender will receive the proceeds of the sale and you cannot be held liable for any debt in excess of this (except in certain circumstances such as fraud or misrepresentation). Of course where your home sells for more than the amount owed to the lender, you or your estate will receive the extra funds.
With a Heartland Seniors Finance Reverse Mortgage you can also take an Equity Protection Option. You can choose to protect 10%, 20% or 50% of the net proceeds from the sale of your property. This means that at all times the percentage protected is yours, irrespective of the loan balance on discharge. Choosing the Equity Protection Option will however reduce the loan amount that you are able to borrow.
Will I continue to own my home?
Yes, you will always own your home and continue to live in it as long as you wish and benefit from any capital growth. Only when you move permanently from your home, when the property is sold or the last nominated borrower moves out of their home or passes away, will the loan be repayable.
Are there any other risks in taking out a Reverse Mortgage?
There are many benefits to a reverse mortgage the main one being that borrowers do not need to make regular loan repayments and can continue to live in their home for as long as they wish, benefitting from any potential increase in property values. However you should also remember that there are some risks including:
- Interest rates are generally higher than for average home loans
- The debt can rise quickly as the interest compounds over the term of the loan - this is the effect of compound interest and is something you need to be aware of before making any decisions
- Your age pension could potentially be affected, depending on what you use the money for
- You may not have enough money left for aged care or other future needs
Further information on the risks of a reverse mortgage can be found at ASIC’s Moneysmart site here.
Do I need independent advice?
You must get independent legal advice before you commit to a reverse mortgage. This can usually be with a solicitor of your choice, who will represent your interests and work with you to explain and discuss your loan.
You should also consider seeking personal financial advice before committing to a reverse mortgage.
Click here to see the offer and get more information
* Residential Property Price Indexes: Eight Capital Cities, Sep 2006 - Sep 2016: http://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0
^Source: CANSTAR - Best Reverse Mortgage Provider - https://www.canstar.com.au/providers/heartland-seniors-finance-reverse-mortgage/
^^ Source: Best Reverse Mortgage - https://www.seniorsfinance.com.au/media/24070/money-magazine-award-2017-review.pdf
# The Heartland Seniors Finance standard settlement fee of $495 will be waived for all applications received by them by 5.00pm (AEDT) Friday, 28th April 2017.
Individuals should consider their own objectives, financial situation and needs and seek appropriate advice. Applications are subject to Heartland’s normal loan approval criteria. Terms and conditions apply. Credit provided by ASF Custodians Pty Ltd (ACN 106 822 780 / Australian Credit Licence No. 386781). For more information please download their credit guide available here.
FiftyUp Club Pty Ltd (CAN 166 905 175) is a licensed Credit Representative (CR 481478) of One Big Switch Pty Ltd (ABN 75 150 963 474) who holds its own Australian Credit Licence (ACL 405918) and is authorised to provide credit services but does not act as a credit provider. In providing credit services to our members FiftyUp Club make no enquiries about an individual’s financial situation, requirements and objectives. By providing a means for members to contact Heartland Seniors Finance directly we are acting as an intermediary.
If you take out a Reverse Mortgage as a result of services provided by us, Heartland Seniors Finance may pay us an ongoing commission of up to 0.20% per annum (plus GST) of the value of any outstanding current loans. FiftyUp Club returns $495 of this commission to members in the form of the waived settlement fee. Further information can be found in the FiftyUp Club Financial Services Guide available here.
Further information about Reverse Mortgages can be found in the Reverse Mortgage Information Statement available here or on the ASIC MoneySmart website here
The FiftyUp Club is a consumer network for Australians aged fifty and over, promoted by Macquarie Media Ltd (which includes Macquarie Radio Network, and Fairfax Radio Network in New South Wales, Victoria, Queensland, and Western Australia), and by Nova Entertainment in South Australia. The FiftyUp Club may earn a commission, paid by the provider, for a member who takes up a special FiftyUp Club offer. The FiftyUp Club may share these commissions with our media partners, which include Macquarie Media Ltd, Nova Entertainment and Nine Network Australia. Part of our commissions will be used to fund future FiftyUp Club Campaigns.
