Household Capital unveils new drawdown loan facility

Latest news / August 27, 2019

 

 

Specialist retirement lender Household Capital has launched a new drawdown loan facility to provide Australian retirees with access to a regular income stream and a lump sum payment using the equity in their home.

 

Unlike other schemes, including Centrelink’s Pension Loan Scheme (PLS) which provide regular income but no provision for lump sum payments, Australian retirees using a Household Transfer® can now supplement their superannuation and aged pension income with the benefit of both.

 

Retirees can also choose to receive income paid either fortnightly or monthly and benefit from the highly competitive interest rates offered by Household Capital and which are significantly lower than those charged by competitors.

 

Launched in March 2019, Household Capital’s Household Transfer® provides Australian home-owners access to additional retirement funds by using a low interest rate loan to transfer a portion of the value of their homes into their superannuation fund or an investment account.

 

An estimated 439,000 Australians intend to retire in the next eight months despite average savings being well below the recommended level[1]. This is fuelling interest for household equity release products like Household Capital’s Household Transfer®.

Adviser-led demand

The new drawdown facility has been developed in response to strong demand from financial advisers looking to help clients establish a regular income stream in addition to receiving a lump sum payment, as part of their retirement funding.

 

Commenting on the announcement, Household Capital Chief Executive Officer Joshua Funder said the firm was committed to providing innovative funding solutions for Australian retirees who continue to live healthier and longer lives but increasingly find their savings locked up in property assets.

 

“As the average age of Australia’s population continues to increase, so does the need for innovative funding solutions to support this demographic shift. We have developed the Household Transfer® as a solution to help address this growing issue and to give retirees flexibility by using their home as a source of funding,” he said.

 

“We find most people looking for a regular drawdown also take a lump sum for a specific purpose, such as renovations, a new car, medical expenses or to provide financial support to children and other family members.

 

“There are various expenses which can arise in retirement so we have developed a flexible funding solution which can be tailored for these individual requirements whatever they may be,” Funder added.

 

The Household Loan is designed to meet the needs of Australian retirees by allowing them to balance their savings, continue to grow their assets during retirement, and harvest a sustainable income from their investments.

 

Australia’s median household superannuation balance at retirement is approximately $200,000 yet the median value of homeownership at retirement is $700,000. Household Capital’s offering can help millions of retiring Australians and to also inject billions of dollars into the Australian economy.

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[1] Roy Morgan, 2019, More Australians intend to retire despite inadequate savings levels