More Aussies in their retirement are releasing capital from equity tied up in the family home.
The market reached $3 billion as baby boomers hit retirement with insufficient money in their super funds and other investments to maintain their lifestyle. They could, of course, sell their houses and down-size, but that often means moving away from a property they have lived in for some time, and potentially away from friends and family. Kevin Conlon, chief executive of the Senior Australians Equity Release Association, says choosing a reverse mortgage, for many, is a more sensible way of achieving the same outcome.
James Hickey, Deloitte Actuaries and Consultants partner, says the three common reasons for taking out a reverse mortgage are to improve regular income, for home improvement and for debt repayment. And if your parents choose it, don’t get too worried about losing your inheritance — most people only draw a maximum of 15 percent of the value of the property.
Find out more about the reverse mortgage market in today’s BTalk podcast.