Accessing your home equity with a reverse mortgage
For many people, accessing the equity that exists in your home can help to finance transitions into later stages of life when you may be asset rich, but cash poor. A reverse mortgage allows you to harness your home's equity, and take out a lump sum amount or regular payments from your bank. The biggest advantage for a reverse mortgage is that the mortgage, interest and all fees do not need to be repaid until your home is sold.
To use the calculator, enter the period of time you are likely to want the loan for (this should be the number of years before you intend to sell the property) and the current value of the loan. The assumed increase in home value is significant, in that a large increase in property value can sometimes offset a substantial amount of the interest being charged on the loan.
The results will give you information on the total value of your mortgage, taking into account both lump sum and regular payments. You can also track the amount of equity remaining in your home as the years progress.
Reverse mortgages aren’t always suitable for everyone; fees, interest, equity clauses and average house price increases can play a big role in deciding on a reverse mortgage. Your local Mortgage Choice broker can help you to explore your options with expert and friendly advice.
To find out more about reverse mortgages, please see our Reverse Mortgage Fact Sheet here.