Why is the Reverse Mortgage so popular?

You may be one of the large number of people reaching retirement age with little or no superannuation, savings or assets other than your family home.  Many people were finding they had to sell their home and move to smaller premises to fund their retirement. The Reverse Mortgage was developed to assist those people that are "asset rich/cash poor".  It is extremely popular amongst people over the age of 60 because it allows you to tap into the equity in your home or investment property without having to move out or sell it.  This then provides the funds to enable you to have a better quality of life and a lifestyle you never dreamed possilble. 

How can Mortgage Mates make my dreams a reality? 

You may have been wanting to go on an overseas holiday or buy a new car, but taking into consideration your pension or low superannuation income you probably thought that the likelihood of saving enough money to do these things were a thing of  the past!!  We would like to inform you that doing these things are certainly not a thing of the past!!  By simply borrowing against your equity, the funds can be used for anything you wish.  Taking out a Reverse Mortgage would not only enable you to go on that well deserved holiday or buy that beautiful new luxury car, but it could also provide you with the extra funds to assist your family financially, renovate your home , pay of any minor debts or credit cards or even pay for medical expenses.  The choice is yours!!
 

What is another exciting feature of the Reverse Mortgage?

Another wonderful feature about the Reverse Mortgage is they can be an excellent source of income.  Your loan can be structured in such a way as to provide you with funds either as a single lump sum or an initial amount with a series of monthly instalments.  If you prefer you can have a combination of both options split over a 5 year or 10 year period.  Once again the choice is totally yours!!  When set up correctly these loans will have no effect on your aged pension payments or eligibility.

What will happen to my equity?

An important part of the loan enquiry process is to estimate how a Reverse Mortgage will affect your equity position over time. Of course, it is impossible to predict with absolute certainty what will happen in the future.  However, based on historical trends in Australian property values and current interest rates, loan calculators can illustrate the likely effect of a Reverse Mortgage on your property's equity.

We recommend the calculator provided by the consumer arm of ASIC .  To access, simply click on the calculator to the left.
Please note:  To download the calculator click on the 'Reverse Mortgage' icon.  You will be asked to open or save an Excel spreadsheet.  If you have Excel already installed on your computer, we recommend you save the file to your desktop and open from there.  If not, then simply select open from the dialog box after clicking on the calculator.

How much will my repayments be and what is the term of the loan? 

The beauty of the Reverse Mortgage is that it is "fixed" for the entire life of the loan and therefore protects you from the ever increasing interest rate rises irrespective of how you draw down the funds.  More importantly, you don't ever have to pay a cent so long as you own your own home or property.  The loan would only ever be discharged or paid out if you were to pass away, move into aged care or sell.

At Mortgage Mates, we take these loans very seriously, so you can be sure of getting a structure that is just right for you.  Of course, due to the importance of knowing how it will effect your own personal circumstances, we always strongly recommend your consult a Centrelink FIS Officer, as well as a Financial Planner.  

Please take the time to have a look at the graph below.  It illustrates how the Reverse Mortgage works and why it is so popular.

Note:  The example shown is based on a $350,000 property, a loan advance of  $100,000 (28.6%) and a fixed interest rate of 8.69% APR. (comparison rate is 8.73% ) * An initial loan advance of $25,000 with subsequent equal monthly instalments of $625 over 10 years. The calculation has also assumed nominal house price growth of 6.00% p.a. The illustration is shown over 15 years.

* The comparison rate is based on a $150,000 loan amount for a 25 year term. Other credit fees and charges are payable.
WARNING: This comparison rate applies to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees and early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.