The research reveals that the size of the reverse mortgage market went up in the past 10 years to $3.6bn, but its growth has slowed since the global financial crunch.
While these ways may help Australian seniors to fund their desired lifestyle without needing to sell their properties, experts warn of a change in interest rates. These loans have a typical annual interest of 1% to 2% but don’t have to be repaid until they die or sell.
However, lenders can only give borrowers a loan amount within the home’s price. Borrowers also cannot be booted even if house values go down. This means that a 65-year-old borrower can only avail 15% of his home’s value, while an 85-year-old can have 45%.
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