Born before 1959? There’s a new way to fund your retirement
Australians over 60 have a new option when it comes to retirement funding.
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According to the OECD, 35.5 per cent of Australians over 65 are living in relative income poverty. Add to that, the COVID-19 pandemic has precipitated a financial crisis that’s seen dividends dry up, rental incomes slashed and interest income plumb new lows. And while superannuation is a great way to fund your retirement, many baby boomers haven’t had the benefit of a full lifetime of super; what they do have has also taken a hit in recent months. Where does that leave asset-rich, cash-poor retirees when it comes to funding their later years?
Many Australians have worked hard and saved their whole lives, and yet may be missing out on the comfortable retirement they deserve. Household Capital enables you to access the third pillar of retirement funding, your home equity, to enhance your lifestyle and wellbeing in your post-work years, without needing to downsize.
A Household Loan, which is a type of reverse mortgage, can provide you with a regular income stream, a lump sum payment or both. It doesn’t require repayment until you vacate the property (although it can be repaid earlier without penalty) and comes with several protections, including guaranteed occupancy for as long as you want to live in your home.
Household Loans are helping to improve retirements around the country. Retirees are drawing on their household capital to fund medical expenses, to provide a contingency fund for those unexpected expenses, or to fund modifications for the family home to make it safe and comfortable for retirement. Many Household Capital customers use home equity to increase their retirement income, so they can enjoy the retirement lifestyle they deserve. Why not see if you’re eligible for a Household Loan today, with a free, no-obligation quote?
Here’s How You Do It:
Step 1: Select your property type below.
Step 2: Once you answer a few questions about your property you can download your free e-guide, which explains how you can transform your retirement using home equity.
The Household Loan is designed to work within Australia’s retirement system and focuses on improving your long-term retirement funding.
The loan allows retired Australians to access their home equity and is available for those aged 60 years and over who own their own property.
Importantly, you cannot lose your home by owing more than the house is worth. The ‘no negative equity guarantee’ (NNEG) clause, introduced in 2012, means you are protected by law and cannot owe more than your home is worth, irrespective of the value of the property.
It’s also important to note, there is no default risk. You cannot be removed from your home by the lender, nor be forced to sell your home at any time against your will, so long as you have met your obligations under the loan, as specified in the terms and conditions of the contract. This relates to maintaining the condition of your home, and paying rates and insurance.
A Household Loan will be repaid when you choose to downsize or move permanently into a retirement village or residential aged care. It may also occur when the last surviving homeowner passes away.
The loan is generally repaid from the proceeds of the future sale of your home. Repayment may also come from funds provided by family members if they do not wish to sell the family home. You can make repayments to your loan at any time without penalty, which will reduce the amount of interest you pay.
Some borrowers choose to pay the interest each month so only the loan principal needs to be repaid at the end of the loan. No further fees apply if you choose to pay the loan out early.
If you would like to explore how a Household Loan could improve your retirement lifestyle, please call Household Capital on 1300 622 100 or click here to see if you’re eligible for a loan.