Reverse mortgages (also known as equity release plans), are an increasingly popular and practical way for aged homeowners (over 60) to refinance or finance their wants and desires in their senior years whilst they are still able to enjoy it.

A reverse mortgage is a loan facility. It’s designed to allow the borrower to take a cash loan against the agreed value of the home however it requires no repayments during the normal term of the loan. A regular bank loan is based upon your ability to repay the loan whereas  a reverse mortgage is based on the home equity and the agreed value of the home which secures and ultimately repays the amount of the loan.

Interest rates on these loans is accrued monthly and accumulated onto the debt principal throughout the term of the loan. he entire debt is then repaid when the borrower either sells or dies, or permanently moves out of the home such as to an ongoing nursing home or aged care facility.