A specialist funding provider has announced a new loan product that will tap previously inaccessible home equity to help older Australians to “live well at home.”
The loan, offered by Household Capital, transfers value from the customer’s home into their superannuation fund or investment account. The funds are then free for discretionary use.
“Retirees want to stay at home, but many are struggling to make ends meet as they age,” said Joshua Funder, CEO of Household Capital.
“We combine a retiree’s home equity, superannuation and aged pension to provide adequate, reliable, lifelong retirement funding while the retiree continues to live at home.”
The average retiree’s super balance lasts 10 to 15 years into retirement, leaving many Australians struggling to make ends meet later in life.
Recent data shows more than $900bn in untapped home equity owned by Australian retirees.
Nick Sherry, Household Capital chair, used his experience as former federal minister for superannuation to point out the larger-scale implications of the loan product.
“Household Capital’s offering potentially releases billions of dollars into the economy to meet the real needs of retirees and their families,” he explained.
“The Household Loan provides responsible and flexible access to lifetime savings, allowing retirees to make sound economic and lifestyle choices,” Funder said.
Borrowers will be guaranteed lifelong occupancy of their home and won’t have to repay more than the value of their home.
According to Funder, the offer is of service to homeowners in all stages of retirement.
“The loan is suitable for people approaching retirement looking to boost a low superannuation balance. It also works for those people in mid-retirement who may have depleted their superannuation and need more income, as well as those retirees who may need funding for the transition to supported care,” he said.
