Access equity in your family home to cover general expenses, medical fees or anything else important to your lifestyle with Macquarie Bank’s Reverse Mortgage Home Loan.
As a protected equity option and with a "no negative equity" guarantee, the Macquarie Bank Reverse Mortgage Home Loan enables you to protect up to 20% of your property’s future value with added security. This gives you peace of mind in knowing you’re protected from owing more than the value of your home.
You can benefit from minimal fees, no income assessment and the option of taking out an aged care extension that gives you up to two years to repay your loan from the date you move into aged care.
Details to consider about Macquarie Bank’s Reverse Mortgage Home Loan
Offering a competitive rate from 6.2% p.a., this Reverse Mortgage home loan offers retirees a range of payment options without having to pay application or account management fees.
How will I be charged interest?
A reverse mortgage allows you to borrow money using the equity in your home. Interest is charged like any other loan, but you typically won’t need to make repayments while you’re living in your home. The loan must be repaid if you sell your home, in the event that you pass away, or in most cases, if you move into an aged care facility.
Interest is capitalised to the loan monthly in arrears, but calculated on the balance daily.
Normally you are charged a higher interest rate on a reverse mortgage than a standard home loan, and you will be charged interest on the loan amount you borrow. Fees and interest are added to the loan balance, which means that you will pay interest on your interest, as well as any fees added to your loan. Over time, the amount you owe will increase.
How will a reverse mortgage affect my future?
You need to consider both your current and future needs. The more money you borrow now, and the younger you are when you borrow it, the less equity you will have in your home to pay for your needs as you get older. How will your health and living situation change in 10 years' time? If you access a large amount of your equity now, you may not be able to afford future costs such as high medical expenses or the need to move into aged care accommodation.
What about LVR?
The minimum and maximum limits for this loan are $20,000 - $1,000,000, however the amount you borrow will change depending on your age. The minimum borrowing age is 70 years and the LVR is influenced by the age of the borrower. For instance, the LVR increases by 2% per year of age up to 75 years after which it increases by 1% per year of age. The maximum LVR is 45% for borrowers aged 90 years and over.
Funds can be accessed by completing a manual redraw form. Cash cards, cheque books and credit card linkages are not available for this loan.
Features of the Macquarie Bank Reverse Mortgage Home Loan
- Protected equity: This allows you to protect up to 20% of your home’s future value, which gives you peace of mind in knowing that you have a guaranteed amount of equity set aside for the future.
- "No negative equity" guarantee: This gives you extra security, as you’re protected from owing more than the value of your property.
- Capacity maximisation: This feature ensures that the funds available for you to access are maintained as interest and fees are capitalised to your loan. As borrowing capacity is determined by the youngest borrower’s age, as they get older they can borrow more. Rather than setting up a new facility in the future, you could be eligible to borrow more depending on how much equity you have and the amount of capitalised interest on the loan.
- Borrow up to 45% LVR with no income assessment: You are eligible to borrow up to 45% of the value of the property without need to undergo an income assessment. This means you can borrow money without having a job or investments that produce income.
- No fixed loan term: No repayments are required until the property is sold, you no longer live in the home or all borrowers are deceased. This means you can get on with living your life and afford life’s necessities without having to worry about finding money for repayments as you would with a regular home loan.
- Aged care extension: This provides you with the flexibility of up to two years to repay the loan from the date you move into an aged care facility. At the end of this extension you may be granted another extension, depending on your situation.
- Discharge fee: $400. You will need to pay this fee to cover legal costs when leaving your loan.
- Total setup cost: $360. This will cover administration expenses of setting up your mortgage.
How to apply for the Macquarie Bank Reverse Mortgage Home Loan
If you’d like to apply for the Macquarie Bank Reverse Mortgage loan, you will need to speak to a mortgage broker or contact Macquarie Bank directly. Here are the eligibility requirements you’ll need to meet before you can be approved for the Reverse Mortgage loan:
- Residency & Age: You are required to be an Australian citizen aged 70 years and over.
- Credit rating: You must have a strong credit rating as Macquarie bank will need to be confident that you will not default on your loan.
- Home equity: You must have equity in your home that you can use to take out this loan.
The following documentation will be required in order to process your application:
- Personal details: You’ll need to provide your current residential address.
- Proof of ID: A passport or driver’s license will be required to show that you are an Australian resident.
- Asset information. In order to process your application you will need to provide details about your assets and in particular the home you wish to use as equity.
- Loan amount. You will also need to let Macquarie Bank know how much you would like to borrow.
For this loan, retirees can benefit from capacity maximisation, flexible repayment terms and not having to pay expensive account management fees.