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Pensioners attack state reverse mortgage scheme

The 2018 Federal Budget expanded the Pension Loan Scheme (PLS) to allow all retirees to obtain a state run reverse mortgage, which allowed pensioners to boost their retirement income by up to $17,800 for a couple without impacting on their eligibility for the pension or other benefits. Now, seniors groups are demanding that the 5.25% interest rate attached to the PLS be lowered in line with rate cuts by the RBA: The current 5.25 per cent interest rate for reverse mortgages under the Government’s Pension Loans Scheme has not fallen despite three official cash rate cuts this year, most recently to 0.75 per cent in October… Retiree groups have accused the Government of double standards for hold

Coalition to review reverse mortgage rate after being accused of ripping off seniors

Josh Frydenberg says current interest rate of 5.25% for pension loan scheme is lower than rates charged by private sector The Morrison government will review the 5.25% rate it charges for reverse mortgages after criticism from seniors groups that it has been gouging pensioners at a time of record low interest rates. Josh Frydenberg unveiled the review on Wednesday night, but he pointed out the current interest rate of 5.25% for the pension loan scheme was lower than the rates currently charged by the private sector. The reverse mortgage scheme was created to give older Australians the option of unlocking equity in their homes to boost their cash income. Pensioners can choose the amount of lo

Retiree reverse mortgage system rates to be reviewed

Retirees who use a federal government reverse mortgage program to boost their incomes are likely to get an interest rate cut after Treasurer Josh Frydenberg announced a review of the system. Mr Frydenberg on Wednesday said the 5.25 per cent rate charged for reverse mortgages under the pension loans scheme would be reviewed following the sharp falls in mortgage rates in the private sector. The scheme, set up in 1985, enables retirees to apply for an income stream of up to 1.5 times the maximum rate of the age pension. A person on the full pension and supplements of about $24,000 could boost their income by $12,000 annually. The scheme has struggled to attract users and Mr Frydenberg recently