Specialist retirement funding provider Household Capital has partnered with industry super fund-owned ME Bank to establish a $100 million wholesale debt facility.
The facility is designed to meet the unmet financial needs of retirees who plan to continue living at home, ME Bank and Household Capital said.
Household Capital managing director Joshua Funder said the loans fill the gap left by the banks and offer flexible solutions for retirees to meet retirement funding needs from a combination of superannuation, the savings in their home and their Age Pension.
“Retirees want to stay at home, but many are struggling to make ends meet as they age.”
Home equity for example, can also be used to fund in-home care and support the transition to aged care, he said, adding this approach also enables the transfer of home equity between generations to fund first-home buyers’ deposits and educational expenses.
Funder said Household Capital loans fill the gap of reverse mortgages, which have not always aligned with the long-term housing and income needs of retirees. The end of 2018 saw CBA and BankWest cease writing new business for reverse mortgages.
Household Capital loans range from $50,000 to $550,000 and charge a variable 5.9% interest rate per annum and 1.5% establishment fee.