Retirees in coastal destinations are increasingly using reverse mortgages to fund their retirement lifestyles and still hold onto their homes.
More than 40,000 Australians use a reverse mortgage according to Deloitte figures, with more than 8,000 signed in the last year.
A reverse mortgage essentially allows homeowners to get a cash loan based on how much their house has increased in value since they bought it.
It’s popular with retirees because they can keep living in their house and pay back the loan when they do sell it, rather than making periodic repayments like with typical mortgages.
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Northbridge is a picturesque suburb on Sydney’s affluent Upper North Shore.
Data from reverse mortgage broker, Seniors First shows the top five NSW suburbs for the most reverse mortgages are Wamberal (2259), The Entrance (2261), Byron Shire (2487), Jervis Bay (2540) and Northbridge (2068).
Seniors First chief executive officer, Darren Moffatt said reverse mortgages can help bridge the gap in expected lifestyle when superannuation falls short.
“Rather than selling and downsizing or leaving the communities they know, many are choosing a reverse mortgage so they can stay in their home with greater financial confidence,” Mr Moffat said.
Shallow sandy riverbed of Curambene creek flowing to Jervis Bay near Huskisson, NSW.
“These are the places many Australians dream of retiring to, The Central Coast, Byron Shire, the South Coast, so it makes sense that homeowners there are finding ways to stay and make the most of it, rather than cashing out and moving on.
“We are seeing people who have worked hard, paid off their home and built significant equity who now find superannuation alone doesn’t match the reality of retirement,” he said.
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Wamberal is a town on The Central Coast with a high rate of reverse mortgages.
Lexi Airey is the chief executive officer for Gateway Bank and said they were also seeing a rise in reverse mortgages and often hear a similar story.
“(Retirees) would rather stay in the home and the community they love than sell up and start over somewhere new,” Ms Airey said.
“For a lot of Australians, it’s about accessing the money they need and not giving up the home and lifestyle they’ve built.
“They want options and the confidence to make the right call for their own retirement,” she said.
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