How Much Home Equity Can You Borrow?
Whether you need to consolidate debts, increase income or peace of mind see how a Household Loan can help you.
Frequently Asked Questions
What is equity release?
Equity release is the mechanism through which you can draw on your home equity.
Your home equity can be accessed in several ways:
1] - by selling your home and downsizing – use the excess proceeds of the sale (if any) to top up your retirement savings
2] - through an equity reversion scheme – instead of borrowing against the value of your home, you agree to sell a share of the future sale proceeds of your home in exchange for a capital sum now
3] - the Centrelink Pension Loans Scheme reverse mortgage – this enables eligible pensioners to receive an additional income stream by taking out a loan against the equity in your home
4] - through a standard reverse mortgage – a loan facility that draws on your home equity
5] -through a Household Loan – which enables you to draw on the wealth in your home, your household capital, to improve your long term retirement funding.
Each of these strategies allows you to access a portion of your home’s value to meet your retirement needs.
Can equity release provide a regular income stream?
A Household Loan can provide a regular income stream, capital - or both! We provide flexibility and choice so you can use your money in a way that best enhances your long term retirement funding.
Taking the money only as you need it will minimise the interest accrued over the life of your loan.
What are the costs of equity release?
Each type of equity release product has a different cost structure, which is why it’s important to do your research and seek advice where required.
In terms of our Household Loan, we offer the lowest rate reverse mortgage product in Australia. The variable interest rate is currently 4.95%. More information about rates and expenses can be found here.
How safe is equity release?
Most equity release products are governed by the National Consumer Credit Protection Act 2009; these protections apply to our Household Loan and other reverse mortgage products.
1] You remain the owner of your home and the title remains in your name. This gives you 100% exposure to any growth (or loss) in the value of your property, into the future.
2] You can stay in your home as long as you want to – you have guaranteed occupancy. You cannot be removed from your home by the lender, nor be forced to sell your home at any time against your will, as long as you have met your obligations under the loan, as specified in the terms and conditions of the loan contract.
You do have a responsibility to remain living in your home, to ensure the council rates are paid, to keep it insured and to keep your home well maintained>
3] You cannot end up owing us 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.
Customer Stories: The ‘Tree Change’
Evelyn is 69 years old and lives alone. She recently left Sydney to start a new life in Mudgee, NSW. She has one married son, a lawyer in Sydney, and a school-aged granddaughter. The move to Mudgee has given her a new start in a beautiful new home; however, it didn’t provide the oft assumed cash windfall that ‘downsizing’ is supposed to deliver.
Evelyn is well informed, understanding both her options and her financial situation. Her main source of income is the Age Pension and she wanted to restructure her finances to improve her financial confidence.
Evelyn had three clear objectives. Firstly, to create a contingency fund, which she’ll use to pay for unexpected expenses and her Private Health Insurance, something she values highly. Secondly, to undertake some work on her home to set her up for the long-term. Finally, to contribute to her granddaughter’s private education costs.
Household Capital helped Evelyn access her home equity to meet these objectives. She decided to use a combination of a regular Home Income payment and capital advances to meet her needs.
Note: customer names and images have been changed to protect their privacy.