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Household Loan
Refinance for 60+
Home Equity Wealth Release
Pension Loan Scheme
Home Reversion Schemes
Tax
Free
Funds
No Regular
Repayments
Required
Consistently
Low
Rate
Award
Winning
Company
Consistently Low Rate
6.20%
variable rate
6.23%
Comparison Rate*
Household Loan Fees and Charges
| Description | Fee |
|---|---|
| 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 |
| Drawdown fees | Nil |
| Regular service fees (monthly, annual) | Nil |
| Early repayment fee | Nil |
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Frequently Asked Questions
Household Loan Interest Calculation
Accessing the savings in your home using a Household Loan will reduce the amount of equity you have in your home over time. As with all loans, interest is charged on the funds you receive.
Whether you receive regular drawdowns or a lump sum payment, interest is charged on the total amount drawn from your loan. Interest is calculated daily but only compounded (added to the loan balance) monthly.
Most loans require monthly minimum payments to repay the loan balance and associated interest charges; a Household Loan defers loan and interest repayment to the loan's maturity date.
What is Compound Interest?
While no regular repayments are required, interest and any fees added to the loan balance will compound over time.
Compound interest means that you pay interest not only on the amount you have borrowed but also on the interest (and any fees) charged. Or, in other words, you pay interest on the interest for the duration of your loan.
Over time, the amount you owe will increase, and the longer you have the loan, the more the interest compounds and the larger the amount you have to repay.
Household Capital also offers an 'interest only' facility, where you can make regular payments so that at the end of the term, only the principal amount you borrow is repayable.
Case study: Jack and Sandra, both aged 67, own their own home valued at $750,000. They borrow $75,000 of their equity at an interest rate of 6.20% calculated daily, compounded monthly. After 15 years, the remaining equity is $701,085 and the loan value is $183,505.
Calculations based on: Household Capital variable rate of 6.20% (as at 27 July 2022). Home value increase of 3% average per year as per the ASIC MoneySmart reverse mortgage calculator default rate – https://moneysmart.gov.au/retirement-income/reverse-mortgage-calculator
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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.