How Equity Release Loans Work

Equity Release loans (sometimes referred to as reverse mortgages) allow people over 60 to convert the equity in their homes into cash.

Unlike a conventional loan, an equity release loan requires no monthly repayments. The interest on an equity release loan is progressively added to the amount you owe (i.e. is capitalised). Vision Equity Living (VEL) guarantee that the loan amount will never exceed the value of your home.

You decide how much money you need and how to spend it. You can have a lump sum, a monthly income or a combination of both.

An equity release loan will not necessarily affect your pension or other Centrelink benefits. HBF and VEL recommend you seek advice from Centrelink or your adviser.

The maximum amount you can borrow is determined by the value of your home and the age of the youngest borrower.

How much can I borrow?

Age of Youngest Applicant	Percentage of agreed Home Value Available*	Example on a home valued at $500,000**
60	15%	$75,000 or $625pm
63	18%	$90,000 or $750pm
66	21%	$105,000 or $875pm
69	24%	$120,000 or $1,000pm
72	27%	$135,000 or $1,125pm
75	30%	$150,000 or $1,250pm
78	33%	$165,000 or $1,375pm
81	36%	$180,000 or $1,500pm
84	39%	$195,000 or $1,625pm
87	42%	$210,000 or $1,750pm
90	45%	$225,000 or $1,875pm
95	50% max	$250,000 or $2,083pm

*   Please note: An extra 1% is available every year from age 60 (eg 60 = 15%, 61 = 16%, 62 = 17%)
**  Examples listed show maximum lump sum and maximum income only. However, any combination of lump sum and income is available to meet your needs.

Your loan only becomes repayable when you sell your home or the last surviving borrower dies or permanently moves out.

All HBF Personal Consultants are SEQUAL (Senior Australians Equity Release Association of Lenders) accredited, which means they are trained to the highest industry standard and adhere to SEQUAL code of conduct.

For further information or to find out if an Equity Release plan is right for you contact our SEQUAL qualified consultants on 08 9265 8822.

 

The Equity Release Loan product is issued by Vision Equity Living Pty Limited (VEL) ABN 57 111 895 473 and distributed by HBF under our Finance Brokers Licence FB3517. The lender for the VEL equity release loans is ABN Amro N.V. Australian Branch. Equity Release Loans are not available in some regional areas and may also be subject to different borrowing ratios and interest rates in locations outside the Perth metropolitan area.

This information is general in nature only and does not take into account your personal objectives, financial situation or needs. You should read the Broker Services Guide – Equity Release Plans and are required to obtain independent financial and legal advice to determine the appropriateness of an Equity Release Loan before proceeding to acquire this product.
 
HBF Financial Services Pty Ltd
ABN18 009 123 675
FB3517