The Canberra Times

Reverse mortgages could offer a more comfortable retirement, without having to sell your home

Reverse mortgages could offer a more comfortable retirement, without having to sell your home

This is branded content for Heartland Reverse Mortgages.

It usually comes in the wee hours; that moment when you've stirred from your cosy slumber and your brain decides it's the perfect time to start working its way through every stress and worry in your head.

And one of the common stresses for many people? Funding your retirement.

Will I have enough savings to be able to live the lifestyle I'd like? Am I going to have to work forever? Am I going to be forced to sell the home I love and downsize into a cheaper place away from my neighbourhood?

For Don and Shirley*, reality hit when they decided they were tired of going to work every day and had agreed it was time to start transitioning to that fulfilling and stress-free retirement they had imagined.

However, it quickly became clear their savings were inefficient and wouldn't allow them to be as comfortable as they had hoped in that next stage of their lives.

Their dream had always been to stay in their own home, making any necessary modifications needed along the way to allow them to live there as they aged.

The answer for the couple turned out to be in the house they loved. After exploring their options it was the idea of using a reverse mortgage to tap into the equity in their property that appealed to them the most.

In 2019, the couple took out their reverse mortgage loan with Heartland, Australia's leading provider of reverse mortgages, and have tailored their loan to meet their individual requirements for funds while continuing to enjoy the comforts of their home as it steadily rose in value around them.

"It's enabled us to to remain in our home by making improvements, ensuring our home 'works for us' as we get older and our needs change," they said.

Tailored for the needs of over 60s

Sharon Yardley, Head of Operations at Heartland, said the ability to continue living at home is cited by their customers as the most important benefit of a reverse mortgage.

In the results of Heartland's latest survey of its customers released in July, more than 70 per cent said it was the top benefit, followed by 'peace of mind from financial stress'.

"In our survey, the top two responses to both the question, 'What is most important to you in retirement?' and, 'What is the most important benefit of a reverse mortgage?' was, 'continuing to own and live in my own home' and, 'peace of mind from financial stress', Ms Yardley said.

"It shows how well the Heartland Reverse Mortgage can help people live more comfortably as they get older through releasing equity from their home without having to sell."

Unsurprisingly, upgrading the family home was nominated by the survey respondents as the top purposes that the funds were put to use for. The most popular reason was 'home improvement for comfort" (37%), followed by "essential home repair or modification" (27%). Coming just behind was the family car with "car purchase/repair" nominated by 26%.

Asked why they would choose to take out a reverse mortgage rather than downsize, the top reason given was that a "reverse mortgage will meet my immediate financial needs" (45%), followed by wanting to "remain in the same community" (36%) and "benefit from any potential increase in property values" (43%).

Funding options to suit individual lifestyles

Don and Shirley took their time to be sure that the Heartland Reverse Mortgage was the right choice for them. It meant they could stay in their home where they felt comfortable and happier, something other options like downsizing or moving into retirement living didn't allow them to do.

As soon as they made the decision to go ahead with Heartland it lifted their cash flow concerns immediately.

Initially, they decided on a lump sum payment to cover home improvements that would make their home a perfect fit for retirement.

They also set aside some funds in a cash reserve facility - like a line of credit - to ensure they had further access to the funds in the future for any unexpected bills or emergencies. The cash reserve came in handy recently when they were confronted with some medical expenses.

"During these difficult and concerning times for all we wish to convey to you all at Heartland just how much it means to seniors like ourselves to have this facility available to us," they said.

*Don and Shirley are real Heartland customers but their names have been changed for privacy.

Heartland is proud to have helped over 22,000 Australians live a more comfortable retirement with its award-winning reverse mortgage. Its products and services continue to be recognised by the industry - it won a 5 Star Lender Award at Your Mortgages 2021 Mortgage of the Year Awards and last year was named Infochoice Best Reverse Mortgage. If you'd like to find out more about Reverse Mortgages contact the team at Heartland on 1300 889 338 or download your free Reverse Mortgage Guide.

Every situation is different - this information has been prepared without taking into account your needs, objectives, or financial situation. If you are considering a reverse mortgage, we encourage you to understand how it may affect your personal circumstances - talk to friends and family, speak to professionals, and use the resources and tools Heartland has available.

This is branded content for Heartland Reverse Mortgages.