Banks of Australia are not motivated enough to give standard loans to senior citizens because of their age and the fact there is a greater risk of not receiving back a full payment of the loan. But what exactly means senior age and what exactly is a reverse mortgage in Australia? In this article, we'll talk a little more about the age for the reverse mortgage in Australia and the reverse mortgage loans in general.
First and most important related to the topic is understanding that there is no one rule and principle that can be simply learned. There's no age defined about what exactly is a senior citizen and after which age a person can get a reverse mortgage. This is because different banks have a different company policy and everywhere you'll get different terms. Some banks will ask you to be over 65, some even over 70. This is also something that is changeable and you might have one term today and have another tomorrow.
Is this some game? Are banks joking? No, this is happening because the Government of Australia have a made a long-term plan about people going to retirement at a higher age. Today's required age of retirement is 65 and a half, but until 2023 it will be 67. The plans suggest that until 2035 the age will reach 70 and it will even be harder to get a reverse mortgage just as it will be hard to get a standard loan. Of course, 2035 is a long time and until then, banks will surely come out with some new ideas and plans.
If some of the banks tell you that you meet the age for the reverse mortgage in Australia, don't sign the agreement right away. Look for the details in other banks too. They might tell you the same, but their terms might be different. One thing everyone will ask for - have a property in your name if you want to get this loan. But the age and the very important interest rates won't be the same. So, somewhere might be enough to be just over 60 and you'll be eligible for the loan, but the conditions for returning the loan might be devastating. You need to be aware and careful about this.
Ask for the interest rates and make a calculation. If you're not good with numbers, ask the bank employee to make a plan and see how much you'll have to return. The basic reverse mortgage principle is that you don't return a single dime ever, but this is not true if you decide to sell or some of your relatives inherit the property. The interest is very important.
So, to conclude, the age for the reverse mortgage in Australia is important to get the loan, but other details are important too. Don't get into debts just because someone tells you you're good to go. Learn, process and mind the risks in the future. They're highly important.