Reverse Mortgages

Reverse Mortgages 2017-04-13T00:16:18+00:00

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ARE YOU OVER 60?

Is your retirement income no longer meeting your living expenses?

Are you considering selling your home to increase your retirement income??

Would you like another option?

We may be able to help.

With the ageing population of Australia, Governments are putting more responsibility on individuals to fund their own retirement. Many people, especially the “baby boomers” generation who didn’t start contributing to Superannuation until fairly late in their life, find that their super and other income sources such as the old age pension, don’t provide enough money to support the lifestyle they’re accustomed to.

If you happen to be in that situation, one option is to sell your home, but that too may be part of the way you want to live. This is where a Reverse Mortgage may provide the answer. You don’t need to earn any income to be eligible and there are no monthly repayments to make. How much you can borrow depends only on your age and the value of your property. In fact, the older you are the more you can likely borrow.

A Reverse Mortgage is available to residential property owners over 60. It allows you to release funds using the equity in your home. You can use these funds as an income stream or for personal lifestyle needs like travel, home improvements etc.

Like a traditional mortgage there’s interest to pay, but you don’t have to make the monthly repayments. The interest is capitalised, which means it’s added to the amount of the loan whilst you live in your home and you can live there for as long as you choose. When your home is eventually sold you or your estate will pay back the amount of the loan (i.e. the cash you received) plus the interest owing.

There are a range of Reverse Mortgage options available. Which one is the most appropriate for you depends on your individual circumstances and other factors. This is where the knowledge and experience of your Citiwide loan specialist can be invaluable. He or she will look at your overall situation and work with you to explain all your options and the advantages and risks associated with each. Then they’ll ensure you get the full benefits from the loan of you decide upon.

This table shows what happens to your loan over time. In this example we assume a constant interest rate of 8.00% on a loan of $50,000 over 10 years:

End of Year #
Capitalised Interest
Loan Balance
1
$4,150
$54,150
2
$4,495
$58,645
3
$4,867
$63,512
4
$5,271
$68,783
5
$5,709
$74,492
6
$6,183
$80,675
7
$6,696
$87,371
8
$7,252
$94,623
9
$7,853
$102,476
10
$8,506
$110,982

Loan Amounts

The below table is an amalgamation of the maximum loan amounts offered by different Reverse Mortgage lenders. To determine how much you could be eligible to borrow, please use the chart below which tells you the maximum percentage of the value of your property that you could borrow.

For example, if the youngest borrower is 65 years of age, and your home is worth $500,000, then you could borrow 20% of that, being $100,000.

Age of youngest borrower      
% of your property value that can be borrowed
60
15.0%
61
16.0%
62
17.0%
63
18.0%
64
19.0%
65
20.0%
66
21.0%
67
22.0%
68
23.0%
69
24.0%
70
25.0%
71
26.0%
72
27.0%
73
28.0%
74
29.0%
75
30.0%
76
31.0%
77
31.0%
78
33.0%
79
34.0%
80
35.5%
81
37.0%
82
39.0%
83
41.0%
84
42.5%
85+
45.0%

The above table is to be used as a guide only. Citiwide Homeloans takes all care in providing this information but takes no responsibility for its accuracy or completeness. All applications are subject to the Lenders guidelines and their ultimate determination.

For more information please call 1300 732 630. You can also contact us using our online enquiry form.