Increasing numbers of Australian homeowners are entering retirement with mortgage debt, with 54% of homeowners aged 55 to 64 having mortgage debt in the financial year 2019-2020. Traditional loan providers often make it challenging for clients over 60 to secure home loan financing, including refinancing existing loans for better rates or terms.
Banks are hesitant to extend finance to those over 60 due to changes in income from salary to savings, despite Australians living longer and often retiring later. This reluctance creates difficulties if a loan term extends beyond a client’s likely retirement age.
Carrying a mortgage into retirement can strain finances, limit retirement enjoyment, and potentially keep individuals in the workforce longer than intended. The inability to refinance or negotiate lower interest rates can make adapting to changes in financial situations harder, potentially leading to foreclosure and loss of home.
Household Capital offers an alternative solution with its Household Loan, a flexible reverse mortgage designed for over 60s. This loan doesn’t require long-term income to qualify and comes with protections such as no risk of foreclosure if a repayment is missed. It provides a flexible solution that can adapt to changing needs and offers guaranteed lifetime occupancy.
Household Capital is also working with brokers using reverse mortgages to meet the needs of older clients in various ways, such as refinancing a home loan, renovating homes for retirement, assisting children with property purchases, purchasing new properties, or re-establishing themselves after divorce.
If you need financial help, feel free to contact Speed Lending Broker.
News source from The Adviser