How Reverse Mortgages Can Fund Travel When You’re Over 60

As an Australian in your 60s, do you find yourself wondering how to fund your travel plans on a fixed income? The good news is that over 60s travel doesn’t have to remain just a dream. A Household Loan offers a practical, flexible way to access your home equity and turn your travel aspirations into reality, without selling the family home you love. This guide provides expert, trustworthy advice on how to responsibly fund your retirement adventures.

Travel offers profound benefits that extend far beyond sightseeing. For retirees, exploring new destinations can significantly enhance mental wellbeing by providing fresh experiences that stimulate the mind and create lasting memories. Travel also strengthens connections with family and friends, whether you’re visiting loved ones interstate or sharing adventures with your partner.

The health benefits are equally compelling. Travel encourages physical activity through walking tours, hiking, or simply exploring new environments. It can reduce stress, boost confidence, and provide a sense of purpose during retirement.

Despite the clear benefits, many retirees face significant obstacles when planning travel. Financial concerns top the list, especially when living on a fixed income from superannuation and the Age Pension. The fear of depleting retirement savings for what might seem like discretionary spending creates anxiety around booking that dream holiday.

Limited income streams make it challenging to budget for expensive flights, quality accommodation, and comprehensive travel insurance.

For many Australians, their home is their largest asset. A Household Loan allows you to access some of that wealth now, while continuing to own and live in your home.

A reverse mortgage allows you to access the equity you’ve built up in your home without needing to make regular repayments. Unlike a traditional mortgage where you pay monthly instalments, the interest on a reverse mortgage compounds over time and is only repaid when you sell your home, move into aged care, or pass away.

This financial solution lets you tap into your home’s value while continuing to live there, giving you access to funds that might otherwise be locked away until you sell.

A Household Loan is a type of reverse mortgage that enables you to unlock the equity in your home and responsibly access a portion of your home’s value to meet your long term retirement needs¹. It also provides you with flexibility and choice to improve your lifestyle and wellbeing while you continue to live in the home you love.

Our Household Loan has a variable interest rate and may change in line with the Reserve Bank of Australia’s (RBA) cash rate. You can access funds as a lump sum for that once-in-a-lifetime trip or set up regular payments to fund ongoing travel adventures. The loan becomes repayable when you leave your home.

The Loan-to-Value ratio (LVR) is based on the youngest borrower’s age plus property value. It starts at 20% at age 60 and increases 1% per year thereafter. You’ll also need to own your home in Australia and meet other eligibility criteria.

Household Capital requires you to get appropriate legal advice to ensure you understand your rights and obligations and to confirm that a Household Loan is right for your circumstances.

Funds from a Household Loan can be used for travel-related expenses, like international or domestic flights, accommodation during your travels, guided tours and experiences, and more.

However, while a Household Loan can be used to fund travel as part of a broader retirement funding plan, we don’t lend solely to fund holidays. Our focus is on providing responsible, long term retirement funding.

Unlike depleting your savings account for one major trip, a Household Loan provides ongoing access to funds. You might choose to take several shorter holidays throughout the year or embark on extended travel for months at a time.

You may repay part or all of your Household Loan at any time, without penalty, giving you the freedom to manage your finances flexibly around your travel plans.

By using your home equity for travel, you preserve your superannuation and other investments for essential living expenses. This approach helps ensure your everyday lifestyle remains comfortable while you enjoy the experiences you’ve always wanted.

Your regular income from the Age Pension and superannuation in most circumstances will be unchanged, providing stability for day-to-day expenses while your travel is funded separately using your home’s value. However, everyone’s circumstances are different, and we always recommend you speak to Centrelink to ensure your entitlements aren’t affected.

There is no requirement for you to make periodic loan repayments (although you can do so at any time without penalty). This means your monthly cash flow remains intact, giving you confidence that you can manage your regular expenses while enjoying travel experiences.

You maintain ownership of your home and benefit from any increase in property value, so you’re not giving up your security to fund your lifestyle.

A Household Loan is a type of reverse mortgage, so you benefit from key structural and legislative protections. You remain the owner of your home and can stay in your home for as long as you want to. Your home remains your base between travels, providing stability and familiarity.

This arrangement may suit retirees who want to travel extensively but aren’t ready to downsize or leave their established community connections.

You cannot end up owing us more than your home is worth. This guarantee protects both you and your family from owing more than the property’s value, regardless of how market conditions or interest rates change over time.

This protection provides peace of mind that your family will never face unexpected debt from your Household Loan.

Interest accrues over time, which means the loan balance grows while you live in your home. Remaining home equity depends on initial LVR, interest rates, property growth, and loan term. In most situations, borrowers retain a reasonable proportion of equity to bequeath.

It’s important to discuss with your family how funding travel through home equity might affect their inheritance. Once the last homeowner has passed away, the loan is settled by the estate within 12 months.

The Age Pension is an important source of income for many retired Australians. At Household Capital, we can work with you to understand how a reverse mortgage can be used to preserve your pension entitlements and always recommend you speak to Centrelink to make sure your entitlements aren’t affected.

Depending on how you structure the loan and use the funds, there may be impacts on means-tested benefits.

Before proceeding with a Household Loan for travel funding, it’s essential to get appropriate legal and financial advice. If you are using your home equity to top up your super or other investments, you need to obtain financial advice.

Drawing from superannuation or savings accounts provides immediate access to travel funds without taking on debt. However, this reduces your financial buffer for unexpected expenses and may impact your long-term financial security.

Once spent, these funds cannot be recovered, potentially leaving you with less financial flexibility for future healthcare needs or other emergencies.

Selling your home and moving to a smaller property can free up capital for travel while reducing ongoing maintenance costs. However, downsizing involves significant transaction costs, emotional adjustment, and the loss of familiar surroundings.

The process can be stressful and time-consuming, potentially delaying travel plans while you navigate the property market.

Some retirees receive financial support from adult children or consider personal loans for travel. Family assistance can strain relationships if not managed carefully, while personal loans require regular repayments that might stress your budget.

Traditional travel loans typically require income verification and regular payments, which can be challenging on a fixed retirement income.

Start by clearly defining your travel goals and estimating realistic costs. Consider not just the immediate expenses but ongoing travel aspirations throughout your retirement. Factor in your current financial commitments and how much you’re comfortable borrowing against your home.

Think about your health and mobility timeline. Many retirees find that travelling while they’re in their 60s and early 70s provides the best experiences.

Start by clearly defining your travel goals and estimating realistic costs. Consider not just the immediate expenses but ongoing travel aspirations throughout your retirement. Factor in your current financial commitments and how much you’re comfortable borrowing against your home.

Think about your health and mobility timeline. Many retirees find that travelling while they’re in their 60s and early 70s provides the best experiences.

Evaluate how using your home equity for travel fits into your broader financial picture. Consider your family’s expectations around inheritance and have open conversations about your priorities for retirement.

Review your other assets and income sources to ensure a Household Loan complements rather than compromises your overall financial security.

Evaluate how using your home equity for travel fits into your broader financial picture. Consider your family’s expectations around inheritance and have open conversations about your priorities for retirement.

If you’re ready to explore how a Household Loan could fund your over 60s travel adventures, start by using our home wealth calculator to see how much home equity you could access. This gives you a realistic picture of your travel funding potential.

Next, contact our retirement specialists for a personalised consultation. They’ll help you understand how a Household Loan works, discuss your travel goals, and ensure this solution aligns with your broader retirement plans.

Your retirement years should be filled with the experiences you’ve always dreamed of. You don’t have to compromise your lifestyle or home ownership to enjoy the travel you deserve. Contact Household Capital today on 13 13 09 for a no-obligation consultation about funding your travel dreams through your home’s equity. Live Well At Home™.