Retirement
Six uses for a reverse mortgage
Reverse mortgages allow home owners to unlock some of the money tied up in their property, which one lending specialist says can be useful for retirees needing access to a new source of regular cash flow.

Six uses for a reverse mortgage
Reverse mortgages allow home owners to unlock some of the money tied up in their property, which one lending specialist says can be useful for retirees needing access to a new source of regular cash flow.

According to Ambreen Sumar, a residential and small business lending expert with financial services firm Omniwealth, most Australians over the age of 65 own their own home.
Some Australian home owners, Ms Sumar said, may be able to benefit from a reverse mortgage to meet some of their income and cash flow needs.
Reverse mortgages work by allowing homeowners to “borrow against the equity in [their] home”, without having to sell the property or lose out on property price growth.
“The loan can be used as a lump sum, regular income plan or a line of credit, so you have flexible options depending on your circumstances,” Ms Sumar added.
Ms Sumar said there were six ways that retirees for whom a reverse mortgage suits can use the money they free up in the process.
Income and pension top-up
For pensioners, a reverse mortgage can be used to improve cash flow, by providing a new regular source of monthly income to help cover medical costs and personal needs, Ms Sumar said.
“Having the additional monthly income that a reverse mortgage can provide means you can enjoy coffee with friends at your local café or indulge in a dinner outing now and then without worrying if you can make it to your next pension payment,” she said.
Home repairs and renovations
Ms Sumar noted that some retirees will need to make repairs or modifications to their homes as their medical needs change, while some older homes may additionally need repairs in order to maintain the property’s value, and that funds generated through a reverse mortgage can help with these changes.
Debt consolidation
A challenge facing many Australian seniors is meeting monthly repayments on credit cards and high-interest loans, Ms Sumar said.
“A reverse mortgage can be a cost-effective solution to the problem by refinancing your mortgage,” she added.
Refinancing existing home loans
Retirees that are still paying their mortgage after retirement will undoubtedly have a reduced income stream, making it difficult to maintain the lifestyle they were accustomed to before leaving the workforce, Ms Sumar said.
Reverse mortgages can be used by some retirees as a way to refinance their mortgage and help alleviate some of this pressure, she added.
Paying for aged care
Covering a refundable accommodation deposit can be difficult and expensive for many Australians, Ms Sumar said, and for many the sale of their family home may be the only way to do so.
Ms Sumar said a reverse mortgage can assist in meeting this fee, while still allowing retirees to maintain ownership of their home.
Travel and holiday expenses
Travelling can be expensive, and Ms Sumar said many Australian seniors miss out on trips they want to take due to the expense.
“Organising a reverse mortgage may help you climb aboard that cruise you’ve always dreamed of, fund a visit to your family interstate or overseas, or finally taking that tour through Europe with friends,” she said.

Retirement Planning
Retirement time bomb requires complex thinking
The majority of Australia’s super assets now sit in the hands of retirees and pre-retirees, but many require more nuanced investment strategies to achieve the lifestyle they want in retirement, a ne...Read more

Retirement Planning
Why some Millennials are struggling to save for retirement
Millennials are struggling to save for retirement as they face challenges that are different from other generations. What are these reasons? ...Read more

Retirement Planning
Retirement Income Review cornerstone ‘not for everyone’
Despite being the cornerstone of the Retirement Income Review, an expert has highlighted that downsizing and withdrawing equity from a property might not be the solution for all older Australians. ...Read more

Retirement Planning
Effective tips that can help Millennials retire faster
Millennials have changed the cultural and societal landscapes of the world. This is unsurprising, given the fact that they are the best educated and most diverse generation in history. ...Read more

Retirement Planning
What you need to know to get ahead financially
Australians looking to get ahead are being advised to analyse their financial situation, set financial goals and reduce debt whenever possible. ...Read more

Retirement Planning
How to adjust your wealth strategy during COVID
Investors are being urged to be conservative about spending, reduce debt and be careful of assets that are supported by government spending, as they look to adjust their wealth strategies during the f...Read more

Retirement Planning
Should older Australians downsize their property?
Older Australians face the dilemma of not being confident about their retirement outcomes, but are among the wealthiest retirees in the world due to a large proportion of their wealth being tied up i...Read more

Retirement Planning
Self-funded retirees ‘hung out to dry’ by 2020 budget
The Association of Independent Retirees has slammed last night’s federal budget release, accusing the government of overlooking older Australians in its post-COVID-19 recovery plans. ...Read more

Retirement Planning
Retirement time bomb requires complex thinking
The majority of Australia’s super assets now sit in the hands of retirees and pre-retirees, but many require more nuanced investment strategies to achieve the lifestyle they want in retirement, a ne...Read more

Retirement Planning
Why some Millennials are struggling to save for retirement
Millennials are struggling to save for retirement as they face challenges that are different from other generations. What are these reasons? ...Read more

Retirement Planning
Retirement Income Review cornerstone ‘not for everyone’
Despite being the cornerstone of the Retirement Income Review, an expert has highlighted that downsizing and withdrawing equity from a property might not be the solution for all older Australians. ...Read more

Retirement Planning
Effective tips that can help Millennials retire faster
Millennials have changed the cultural and societal landscapes of the world. This is unsurprising, given the fact that they are the best educated and most diverse generation in history. ...Read more

Retirement Planning
What you need to know to get ahead financially
Australians looking to get ahead are being advised to analyse their financial situation, set financial goals and reduce debt whenever possible. ...Read more

Retirement Planning
How to adjust your wealth strategy during COVID
Investors are being urged to be conservative about spending, reduce debt and be careful of assets that are supported by government spending, as they look to adjust their wealth strategies during the f...Read more

Retirement Planning
Should older Australians downsize their property?
Older Australians face the dilemma of not being confident about their retirement outcomes, but are among the wealthiest retirees in the world due to a large proportion of their wealth being tied up i...Read more

Retirement Planning
Self-funded retirees ‘hung out to dry’ by 2020 budget
The Association of Independent Retirees has slammed last night’s federal budget release, accusing the government of overlooking older Australians in its post-COVID-19 recovery plans. ...Read more