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For those interested in accessing home equity through a reverse mortgage, there are a number of options on the market and choosing the right solution depends on your circumstances and needs.

The government’s Home Equity Access Scheme is one option that is increasing in popularity, with more pensioners looking to use the power of the equity in their homes to boost their retirement finances.

From June 2022 to June 2023, the Department of Social Services reported that participants in this scheme rose from 6041 to 9750 – an increase of just over 60%. Similarly, the total monetary value being drawn in this scheme rose to $240 million, up from $138 million the year prior.

This scheme is open to individuals who can meet the criteria for an Age Pension, or are partnered with someone who is. It allows eligible participants to use the equity in their properties (owner-occupied or investment) as collateral to access income stream or lump sum payments.

Under this scheme, participants can receive a fortnightly payment up to 150% of the maximum rate of fortnightly Age Pension, or two lump sum advances per year of up to 50% of the annual rate of age pension. A couple on the full Age Pension could see their fortnightly payments boosted by up to 50% without affecting the means testing of their age pension.

Typically, repayment of a reverse mortgage is fulfilled upon vacating the home, though voluntary repayments can be made during the lifetime of the loan in order to reduce the loan balance.

Equity Empower is available to borrowers 55 years and over, with eligibility not tied to the Age Pension age. It doesn’t require proof of income or employment and is suited to those looking to access a loan with flexible drawdown and repayment options and no fixed term. Funds can be accessed via a lump sum, line of credit or a regular income payment – or a combination of these. Applicants have the flexibility to access funds when it suits them as interest is only charged on funds as they’re drawn, and repayments can be made at any time with no early repayment charges.

Applicants can access up to $2,000,000 of equity from their property (owner-occupied or investment), with only a one-off loan establishment fee of $995 deducted from the loan amount at settlement – there are no ongoing fees. All Inviva loans have a no negative equity guarantee which protects applicants from ever owing more than the value of the home, and for loans secured against a property that the borrower(s) live in – there is a lifetime occupancy guarantee which means provided loan obligations are met, borrowers can stay in their properties as long as they wish without ever being made to sell their property.

If you are looking to securely unlock the equity in your home to realise your retirement dreams without selling your home, visit us at https://www.inviva.com.au/equityempower to learn more.

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The information in this article has been prepared without taking into account your objectives, financial situation or needs. As with any major financial decision, Inviva recommends that you consider obtaining independent professional advice to consider if a reverse mortgage is the right loan for you.

Applications for credit with Inviva are subject to eligibility and lending criteria. Fees and charges are payable and terms and conditions apply, which are available upon request.