Reverse Mortgage Interest Rates & Fees
Rising Interest Rates
Many of us are concerned about rising interest rates and retirees are no exception – especially those making mortgage or credit repayments from a fixed income. Keeping up with repayments can be challenging at the best of times; in an environment when the cost of living is rising but income is not, it can have devastating implications for retirement lifestyles and leave older Australians worried about how they’re going to make ends meet.
Savvy retirees are accessing their home equity, their Household Capital™, to refinance their debt and meet the current challenge of the cost of living crisis. This provides both long-term retirement funding and a comfortable retirement lifestyle.
If you’d like to improve your retirement funding but you’re worried about the impact of rising interest rates, you can use our interest rate tool to model that impact. The tool illustrates the impact of three potential interest rates scenarios over five and ten years, based on our average customer home value and loan size. If you would like a more personalised assessment, use our calculator or call us on 1300 057 080 for a friendly obligation-free discussion.
If you are still concerned about rising interest rates, why not consider the Government low-interest rate Home Equity Access Scheme (HEAS)? It’s a reverse mortgage-style loan issued by the federal government that allows eligible Australian retirees (including self-funded retirees) to boost their retirement income by drawing on their home equity and borrowing up to 150% of the full Age Pension entitlement.
The Household Capital Pension Boost service helps Australian seniors access their home equity through the HEAS by taking care of the complete application process and removing the barriers that often come with dealing directly with Centrelink.
To learn more about the Household Capital Pension Boost service and the HEAS, please click below.
Boost your retirement income
Learn more about our Pension Boost Service and accessing the equity in your property
Consistently Low Rate
Household Loan Fees and Charges
|Establishment Fee (includes valuation and conveyancing)||$950 flat fee|
|Special attendance fee (e.g., variation or substitution of security, discharge of mortgage)||$250 per attendance plus third-party fees|
|Fee for provision of paper copies of documents||$25 per request|
|Regular service fees (monthly, annual)||Nil|
|Early repayment fee||Nil|
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Frequently Asked Questions
What are the costs?
The interest rate on a Household Loan is 9.20%p.a. (9.23%p.a. comparison rate*).
Household Capital charges an Establishment Fee (including conveyancing) of $950. Valuation fees may also apply to your property. Government fees and charges to establish your loan will be charged at cost if applicable.
Are reverse mortgage interest rates fixed or variable?
Reverse mortgages are only available with variable rates; the main benefit of this is that you have flexible repayment options. A Household Loan may be repaid, in part or full, at any time without penalty.
Why are reverse mortgage interest rates higher than standard mortgages?
Reverse mortgage interest rates are generally higher than a standard mortgage because there is no obligation for borrowers to make repayments until the end of the loan.
Why is the mortgage interest rate important?
The lower the reverse mortgage interest rate on your loan, the more of your home equity you retain and can access to fund your long-term retirement needs. It’s that simple.
What happens to the rates on a Household Loan when the RBA lowers the cash rate?
The Reserve Bank of Australia (RBA) has indicated that it might start easing (or lowering) rates later in 2023 or, at least in early 2024. At that time, Household Capital will lower its rate accordingly.
More Interest Rate Articles
Disclaimer: Comparison rate based on a secured loan of $150,000 over a 25 year term. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates.
Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. ^Amounts spent will be added to your Household Loan and accrue interest like any other funds drawn via your Household Loan.