7 ways you can use a reverse mortgage

1. A loan for day-to-day expenses

Jenny was 74-years-old and living solely on a pension. She had only $664 in her transaction account and $15,260 of credit card debt when she applied for a reverse mortgage.



Jenny took out a $50,000 reverse mortgage to refinance her credit card debt, make home improvements, and cover day-to-day living expenses.

2. Spend quality time with your family

Caroline moved homes to be closer to her children, but found her pension did not allow her to spend time with them or go on holidays.



“I thought why should I sit here and twiddle my thumbs when I’ve only a few years left, so I arranged for some extra money to allow me to just enjoy my time,” said Caroline.

3. Finance a holiday

Fancy a trip overseas? Or perhaps campervanning around Australia is more your style?



Joey was 66-years-old, retired, and living primarily off his pension. He had a property valued at $360,000 and only $1,019 of cash in his bank account which was held by a different lender.

Joey paid for his holiday by borrowing a $70,000 lump sum through a reverse mortgage.

4. Help out a family member in need

Kathleen lived by herself and was saving for retirement. However, when one of her grown children unexpectedly needed extra support, Kathleen left her job to help provide care.



Without work income, she could not afford to cover her debt repayments so she took out a reverse mortgage.

Later, Kathleen was able to re-enter the workforce and made voluntary repayments on her reverse mortgage.

5. Renovate and downsize

Fred was 65-years-old and living alone after separating from his partner. He decided to quit his job and redirect his efforts into building his dream home.



Living on the Newstart Allowance, Fred chose to take out a reverse mortgage to cover the shortfall that losing his partner’s savings and wages caused in finishing the new build.

He planned to finish the home, staying in it no more than 12 months, then downsize in the same area to pay off the reverse mortgage.

6. Continue to live at your current home

Amy and Roger had lived in the same home for the last 30 years. They took out a reverse mortgage to finance home improvements that they believed would allow them to continue to living independently in their home as they grew older.



These improvements included building a ramp to replace stairs, replacing ageing carpets, and installing heating and cooling systems.

7. Early loss of employment

Tom worked for the same employer for about 40 years. After taking unpaid leave to recover from an unexpected illness, his employment was terminated with three weeks’ salary.



Tom was ineligible to receive the age pension so he took out a reverse mortgage to supplement his superannuation and cover his day-to-day living expenses.

Want to find out more?

It’s important to note that a reverse mortgage isn’t for everyone.

There will be some scenarios where it may be a good fit, and others where there may be other more suitable options available.

If you’d like to weigh up which category you fall into, get in touch. We’d love to chat with you about your future needs and whether a reverse mortgage could help fulfil them.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.