Frequently
asked questions

How can I use my Household Loan?

A Household Loan can be used to meet a wide variety of your retirement needs, including:

  • Top up your super to boost retirement income
  • Repay your home loan
  • Renovate your home
  • Give to family when they need it most
  • Provide first home buyers deposits for family members
  • Support educational expenses for family members
  • Pay for transport and travel needs
  • Pay for health insurance and medical expenses
  • Pay for in-home care, tailored to meet your needs
  • Fund aged care Refundable Accommodation Deposits or Daily Accommodation Payments

What is the interest rate?

Household Capital is pleased to be able to offer its Household Loan at a variable rate of 5.40*% per annum, which is Australia’s lowest rate for a reverse mortgage or equity release product.

 

As we continue to diversify our sources of wholesale funding, we aim to further reduce the rate and maintain our position offering access to home equity at Australia’s lowest rate.

 

*The Comparison Rate based on a loan of $150,000 for 25 years is 5.46% per annum. Fees and charges may be payable.

 

WARNING: This comparison rate is true only for the examples given and may not include all fees and charges.  Different terms, fees or other loan amounts might result in a different comparison rate.

Will my Age Pension be affected?

The Age Pension is an important source of income for many retired Australians. We can work with you to understand how a Household Loan can be used to preserve your pension entitlements.

Can I renovate my home?

To Live Well At Home, the planning of home maintenance and repairs is important. We understand you may need to plan for modest repairs and aged-living upgrades throughout retirement. Your Household Loan can meet the costs involved in performing necessary modifications to improve your quality of life and increase the value of your home.

What if I already have a mortgage?

If you are retiring with a mortgage on your home, we can help to refinance this debt with a Household Loan. Importantly, a Household Loan guarantees your long-term occupancy of your home, and you don’t have to make any monthly or ongoing interest payments from your retirement income.

What can I pass on to my family?

A Household Loan allows you to guarantee a percentage of the future value of your home remains available to you or your estate when it is sold. While no one can predict how much your home will be worth when it is sold, our technology can help you understand how much your loan will increase over time and what this means for the equity in your home. ASIC’s MoneySmart Reverse Mortgage Calculator can also help you understand how a similar loan would work and the likely value that would remain.

Can I still downsize my home?

For some retirees, Living Well At Home might mean moving to a smaller and more manageable property. A Household Loan may (subject to approval) be available on your next home, allowing for any change in home value. You can repay your Household Loan at any time; you can also make partial payments which will reduce the amount you owe and reduce the amount of interest you will have to pay.

What if I move to an aged care facility?

If you need to move to a supported aged care facility you may require a capital deposit. You can use a Household Loan to fund a Refundable Accommodation Deposit. At the end of care, the remaining deposit amount is refunded and is allocated to your estate.

Can I still rent my house?

As the owner of your home, you are able to supplement your Household Income through renting while you are living in your home. If you move into an aged care facility, you can rent your home for up to two years. If, however, you move out permanently, your Household Loan must be repaid.

Should I get financial advice?

You are required to get appropriate financial advice to determine how best to deploy your home equity to ensure improved long-term retirement funding. A financial adviser can help structure your financial affairs to maximise entitlements to the Age Pension.

Should I get legal advice?

You are required to get appropriate legal advice to ensure you understand your rights and obligations and to confirm that a Household Loan is right for you.

Can I be forced to leave my house?

You own your home and retain the title to your home. The only time your Household Loan will need to be repaid is when you sell or move out of home, are no longer able to live independently at home, or if you commit a serious breach of contract.

How does Household Capital get paid?

Household Capital receives an Establishment Fee to cover the costs of putting the loan in place, and interest is charged on the capital drawn from your home. Household Loans have a variable interest rate with no ‘break costs’ or hidden fees.

How does a Household Loan work?

A Household Loan is a type of reverse mortgage. Key information is available in the following PDF download:

Key information about reverse mortgages.