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Household Capital offers lowest rate reverse mortgage in Australia

Josh Funder   CEO - Household Capital
October 1, 2019 2 MIN

01 October 2019: Household Capital, an independent, specialist retirement funding provider today announced it will further reduce its interest rate, passing on, in full, today’s RBA rate cut. Household Capital has reduced its interest rate in line with each of the three RBA rates cut this year.

Lowest rate

Household Capital’s innovative approach to wholesale funding means it can offer a rate significantly lower than its competitors, including the government’s Centrelink Pension Loans Scheme (PLS), which is set at 5.25%. Household Capital’s rate will now be 5.15%. Dr Joshua Funder, Chief Executive Officer, said, “Being able to offer the lowest possible rate to retirees is important; a lower rate of compounded interest over time means our clients will benefit from preserving more home equity throughout the lifetime of their loan.”
“Our rate cut ensures Household Capital offers the lowest cost access to home equity.”

Centrelink Pension Loans Scheme

The revamped PLS, relaunched on 1 July 2019, is a reverse mortgage type product that’s administered by Centrelink and provides for an enhanced income stream. It does not, however, provide for all retirement funding needs.

“Improved retirement income is important but does not address retirees’ capital needs; you can’t always cover major medical expenses, or replace a leaky room, or appropriately modify a home from the pension,” said Dr Funder.
“Household Capital provides Australian homeowners flexible access to capital; this may include a regular income stream, improved housing, contingency funding for unexpected expenses or funding the transition to aged care.”

Mortgage stress in retirement

Although an interest rate cut might help the hundreds of retirees who are still paying a mortgage, it’s unlikely to alleviate the financial stress being experienced by so many.

The recent report by Australian Housing and Urban Research Institute (AHURI) found more older Australians are finding it difficult to pay off their mortgage debt before they retire; the average mortgage debt among older Australians has blown out by 600 percent since the late 1980s.

“Keeping up with mortgage repayments can really eat into retirement funding; most retirees aren’t on the low introductory rates you see advertised, so they’re really doing it tough,” said Dr Funder.

Refinancing a forward mortgage with home equity not only frees up their retirement funding, the consumer protections governing reverse mortgages removes the risk of default, the risk of the bank taking the family home.”

Low rates are not good new for retirees

For those retirees reliant on interest income to fund their retirement, lower rates are another blow. Many risk averse retirees are not prepared to invest in higher yielding assets, so are really feeling the pinch.

Household Capital provides Australian homeowners access to additional retirement funds by using a low interest rate loan to transfer a portion of the value of their homes to meet a range of long-term needs. These may include income, housing, contingency funding and aged care.

“We can help older Australians by providing responsible access to their home equity to improve their retirement funding,” said Dr Funder.

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Call us free today for a chat on   1300 622 100

Household Capital passes on full RBA interest rate cut to customers - again

Josh Funder   CEO - Household Capital
June 3, 2019 1 MIN

03 June 2019: Household Capital, an independent, specialist retirement funding provider, announced today it will again reduce the interest rate on its Household Loan in line with the RBA’s rate cut. Household Capital now offers the lowest rate to older Australians needing to access their home equity to improve their retirement funding.

Lowest rate

Household Capital’s innovative approach to wholesale funding and building strategic partnerships means it can offer this lower rate.

Dr Joshua Funder, Chief Executive Officer, said, “Our innovative approach to wholesale funding means we can sustainably offer Australia’s lowest rate to retirees needing to access their home equity.”

“To honour our commitment to keep rates as low as possible, we passed on the full 0.25 percent rate cut last month; we’ll also pass on this rate cut, in full, to our clients.”

Major retirement funding need

Since launching in March 2019, Household Capital has verified a strong need for improved retirement funding among Australia’s retirees.

“Australians are living longer but many do not have enough super savings to provide sufficient income throughout retirement,” said Dr Funder.
“We’ve fielded calls from financial advisers, brokers and aged care advisers, as well as direct clients, looking to access home equity for a range of purposes.”

“Lowest rates are important to ensure the best interests of clients are fully considered.” Household Capital provides Australian homeowners access to additional retirement funds by using a low interest rate loan to transfer a portion of the value of their homes to meet a range of long-term needs including income, housing, contingency funding and aged care.

Low rates not good for everyone

Low rates aren’t cause for celebration for everyone, particularly those retirees dependent on interest earned from savings in term deposits.
“With interest rates in Australia at historic lows, many retirees are really feeling the squeeze,” said Dr Funder.
“We can help these people by providing responsible access to their home equity to improve their retirement funding.”

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Call us free today for a chat on   1300 622 100