Reverse Mortgage Calculator
Reverse Mortgage Calculator
If you’re a homeowner aged 60 and over, a reverse mortgage is one way that you may be able to leverage the equity in your home to access extra cash. This is not something all lenders offer, but there are other ways to access the equity in your home which may be more suitable for your situation.
A key feature of a reverse mortgage is that you can stay in your home and won’t have to make repayments to your lender as long as you’re living there. Once you or your estate sells the property though, the reverse mortgage loan will need to be repaid to the lender in full.
The interest charged on the loan will compound over time. Even though you won’t have to repay the loan as long as you’re in the house, interest is still compounding during this period. When the time comes to sell, you or your estate will have to repay this interest in addition to the loan balance you borrowed.
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Reverse mortgages allow you to borrow more as you age. Each year, the proportion of your home’s value that you can borrow increases. As a general example, if you're 60 years old, you may only be able to borrow 15–20% of the value of your home. This might then be increased by 1% for each year over 60.It's important to weigh up how reverse mortgages could affect your financial situation. While you won’t need to make repayments when still living in your home, once the property used to secure the loan is sold, the reverse mortgage loan balance will need to be repaid in full, including interest and any ongoing fees.
* The calculator below has been provided in good faith as a guidance tool only. Results are not financial advice, are a guide only, and are not a guaranteed outcome or quote. Borrowers should always discuss their individual situation with an Australian Credit Licensee or authorised Credit Representative.