Reverse Mortgage?
Some elderly Australians are trapped asset rich, income poor. Whilst downsizing might be the smartest solution, another option is a reverse mortgage.
No income is required to qualify, however, credit providers are required by law to lend money responsibly, so not everyone will be able to obtain a reverse mortgage.
A reverse mortgage is a type of loan that has been specifically designed for seniors over the age of 62 years to borrow money using the equity in their home as security. The loan can be taken as a lump sum (for a holiday, renovation, boat, accommodation bond for aged care, etc), a regular income stream, a line of credit, or a combination of all these options.
Interest is charged like any other loan, except the borrower is not required to make repayments while they live in their home – the interest compounds over time and is added to the loan balance. The borrower remains the owner of their house and can stay in it for as long as they wish.
The loan must be repaid in full (including interest and fees) when:-
- the borrower sells their home,
- they move into permanent aged care,
- the last surviving borrower passes away.
A reverse mortgage is not the same as a house reversion scheme, where a portion of the house is sold.
The family need to understand the impact on the reduced “inheritance”.
It will not be cheap, fees will apply, it will take time, legal advice should be obtained, and expect numerous conditions. Always seek help and involve the family.
AcctWeb
Hot Issues
- FBT Reminder – Odometer Reading
- ATO’s debts on hold campaign prompts new IGTO guidance
- A comprehensive collection of small business benchmarks
- The 2025 Financial Year tax & super changes you need to know!
- Underperforming employees: When can you terminate?
- A comprehensive list of guides to industry specific tax deductions.
- ‘Renewed concerns’ about economy sees consumer sentiment dip: Westpac
- Oldest Buildings in the World.
- Small businesses may ‘collapse under strain of payday super’, IPA warns
- ATO’s hands tied with scrapping on-hold debts, expert says
- What Drives Your Business Growth and Profits?
- Australian Taxation Office (ATO) shifting to firmer debt collection activity
- Why employee v contractor comes down to fine print
- Sharing economy reporting regime for platform operators
- Countries producing the most solar power by gigawatt hours
- Illegal access nets $637 million
- Accessing superannuation benefits.
- Does your business have a company Power of Attorney?
- Labor tweaks stage 3 tax cuts to make room for ‘middle Australia’
- GrantConnect
- 2 in 3 SMEs benefit from instant asset write-off, survey reveals
- Updated guidance on R&D claims
- Do you know how to recover debts?
- Wheat Production by Country
- Types of small business benchmarks
- What is a Commercial Lease?
- ATO warns advisers against suspect R&D tax claims
- Vimeo test
Article archive
- January - March 2024
- October - December 2023
- July - September 2023
- April - June 2023
- January - March 2023
- October - December 2022
- July - September 2022
- April - June 2022
- January - March 2022
- October - December 2021
- July - September 2021
- April - June 2021
- January - March 2021
- October - December 2020
- July - September 2020
- April - June 2020
- January - March 2020
- October - December 2019
- July - September 2019
- April - June 2019
- January - March 2019
- October - December 2018
- July - September 2018
- April - June 2018
- January - March 2018
- October - December 2017
- July - September 2017
- April - June 2017
- January - March 2017
- October - December 2016
- July - September 2016
- April - June 2016
- January - March 2016
- October - December 2015
- July - September 2015
- April - June 2015
- January - March 2015
- October - December 2014
What our clients say about us