Tag Archives: Household Capital

Retirement lender passes on full RBA rate cut

  A retirement lender has announced its decision to reduce interest rates in line with the Reserve Bank’s cash rate cut.   Household Capital has announced that it will once again lower its interest rate on its Household Loan product following the Reserve Bank’s decision to drop the official cash rate to the new historic low of 1 percent.   The specialist retirement lender had launched the loan in March this year, allowing retirees to access additional retirement funds by using a low interest loan to transfer a portion of the value of their homes into their superannuation fund or investment account. At the time of the launch, the product charged an interest rate of 5.9 percent p.a.   “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,...

Household Capital passes on full RBA interest rate to improve retirement funding

  Household Capital, an independent, specialist retirement funding provider, has announced 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...

Australian retirees have inadequate access to their savings

    Household Capital, an independent, specialist retirement funding provider, said yesterday that a major issue facing Australian retirees was inadequate access to savings.   Josh Funder, Household Capital’s Chief Executive Officer, said retirement funding adequacy was a very real issue facing retired and soon-to-be-retired Australians.   Mr Funder was responding to a number of recent news articles, including research by Roy Morgan, that suggests an increasing number of Australians intend to retire despite inadequate retirement savings levels.   “Household Capital believes that’s only half the story – the other, critical piece, is inadequate access to savings,” said Mr Funder.   Inadequate savings? According to the Roy Morgan research, the average gross wealth (total assets excluding owner-occupied homes) of intending retirees is $299,000.   The average debt level for this group is currently $27,000; while not significant, it reduces average net wealth to $272,000, a level noted by Roy Morgan...

How Australians are faring in saving for retirement

Nearly 5.5 million Australians struggle to meet their future needs in retirement. How do your savings stack up?   The state of play for retirees Research conducted by Roy Morgan suggests the average gross wealth (total assets excluding owner-occupied home) is $299,000. The average debt level for the same group is $27,000, reducing the net wealth of soon to be retirees to $272,000.   Household Capital chief executive officer Josh Funder believes funding for retirement is a significant issue for a majority of Australians.   “Roy Morgan’s figures tie in with our research; for many Australians, compulsory super started too late into their working lives,” Mr Funder said.   More than 5.5 million so-called Australian Baby Boomers (those people born between 1946 and 1964) have entered or are about to enter retirement.   “As subsequent waves of Baby Boomers approach retirement, inadequate funding looms as a major socioeconomic problem that...

Equity release an option for retirement income

  There is an estimated $1 trillion in ‘untapped’ home equity, according to retirement funding provider Household Capital, offering retirees an alternative way to fund their retirement.   The organisation said much of a retiree’s wealth was locked up in their property, meaning they were reliant on limited savings in their super to fund retirement.   According to research by Roy Morgan, the average gross wealth of intending retirees was $299,000 but when a property was included, the total rose to nearer $1 million.   Household Capital chief executive, Josh Funder, suggested releasing this equity from property was a way retirees could boost their savings.   “Most Australians have done a great job paying off their mortgage and effectively ‘saving’ in their family home. In fact, there’s nearly $1 trillion in untapped home equity owned by Australian retirees.”   Equity release was a common measure in the UK and Canada...

Retirement funder partners with ME Bank

  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...

$100 million debt facility announced by retirement funding group

  ME Bank and specialist retirement funding provider Household Capital, which launched earlier this year, have announced a partnership to establish a $100 million wholesale debt facility.   The loans, which would be offered at an interest rate of 5.9 percent, were designed to provide funding for retirees who wanted to remain living at home, feeding into Household Capital’s model of using loans to transfer a portion of clients’ house values into their super funds or investment accounts.   “Household Capital has expanded access to home equity, improved the customer experience and established new sources of finance,” Jamie McPhee, ME Bank chief executive, said. “We are pleased to work with such an innovative group to transform the lives of Australian retirees.”   ME Bank holds a minority equity stake in Household Capital.   Link to article

Retirement lender unveils $100m home equity funding

    Independent retirement funding provider Household Capital has partnered with ME Bank to establish a $100 million wholesale debt facility.   The loans will be offered to retirees who can use the funds to balance their savings, grow assets or source a sustainable income from their investments.   Household Capital managing director Josh Funder said the interest rate was the lowest currently available to retirees needing to access their home equity.   “Traditional bank reverse mortgages charged around 6.4 percent. Since the banks withdrew from providing access to home equity for Australian retirees, many remaining providers have increased their rates even higher,” Funder said.   “Working with ME Bank to deliver more efficient and responsible access to home equity, we are able to provide a rate of 5.9 percent.”   According to Household Capital, the reverse mortgage market in Australia had remained static at about 35,000 outstanding loans and...

Alan Kohler interviews Josh Funder: The Constant Investor

  Alan Kohler on Household Capital and its approach to home equity:   "What’s different about it? Well, it’s a lower LVR and it’s a wholesale funding line from ME Bank, which means that the interest rate is lower than the normal reverse mortgage, it’s 5.9%. It’s still obviously a higher interest rate than a normal mortgage but because the money is leant and not repayable until the end and the interest capitalises, these sort of things are always higher interest rates and they have to be.   But it is an interesting way to access home equity, for whatever reason you need it for. They’re suggesting you put the money into super so that it earns as much as 5.9% to in effect pay the interest on it. The business has got some substance to it.   It’s got some interesting people behind it including the former Minister for...

Multiple mugging survivor turns hand to helping retirees stretch resources

  The idea for Household Capital, which essentially allows retirees to use equity in the family home to fund their retirement ­expenses, also stemmed back to Funder’s chairmanship of the progressive think tank Per Capita, which was established by technology entrepreneur Evan Thornley in 2007. (more…)
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