Later Life Lending: Your Home Can Help Fund Your Retirement

Many Australians reach retirement in an unusual position:

• A valuable home
• Significant equity
• But limited access to traditional credit

You can be asset rich but cash-flow constrained.

Later life lending and reverse mortgages can provide another option, allowing eligible retirees to access a portion of the wealth they have built in their home without necessarily selling it or making regular monthly repayments.

Why retirees need access to capital

There are plenty of reasons, and most of them have nothing to do with financial trouble:

• Refinance an existing mortgage
• Renovate the home to age in place
• Fund medical, dental or aged care costs
• Replace a car
• Supplement retirement income
• Create an emergency reserve
• Help children or grandchildren
• Travel and enjoy retirement

The fourth source of retirement funding

We traditionally think about retirement being funded from three places:

Superannuation + Investments + Pension or Income

But homeowners potentially have a fourth: home equity.

The question should not simply be "Why would I take on debt in retirement?"

Perhaps the better question is: "How can I use all the wealth I have accumulated, including my home, to fund the retirement I want?"

That is where a mortgage broker working alongside a financial planner can create a very different retirement conversation.

Reverse mortgages carry a No Negative Equity Guarantee, and they can affect pension eligibility and what you leave behind. They suit some people and not others, so this is a conversation to have with a licensed financial adviser alongside us.