MELBOURNE MORTGAGE FINANCE LENDING UPDATE – 01.02.25

Eligibility for a Reverse Mortgage Loan

• borrowers are usually over the age of 60 at the time of application

• partners can be just below the age of 60 (subject to lender approval), but the principal borrower must be over 60

• suitable properties include principal residence, investment property or holiday home (but not retirement village units)

• properties must be in a postcode location which is acceptable to the lender

• properties must be owned by the borrowers in their own personal names

Current Variable Rates

• if no interest payments are made, variable rate is currently 8.95%

• if half “interest only” payments are regularly paid, the rate falls to 8.45%

• if full “interest only” payments are regularly paid, the rate falls to 7.95%

Paying Out Existing Debts

• clearance of existing debts is the most common reason for reverse mortgage loans

• many customers have substantial mortgage debt and loan repayments have become unaffordable

• existing mortgage debt must be fully paid out at so the new lender can take normal 1st mortgage security

• clearance of personal loan and credit card debt is also very common

• monthly repayments all on current debts can be eliminated, so borrower cash flow is greatly improved

Establishing a Cash Reserve Fund

• many borrowers also establish a Cash Reserve fund as part of the loan structure

• Cash Reserve funds remain with the lender, so interest is not paid on these reserve funds

• Funds can be drawn at any time in the future to pay for future needs

• interest is only charged on these funds as from the time they are drawn

Call Barry to discuss lending scenarios … “on the spot” answers available.

Barry Le Brocq

Melbourne Mortgage Finance (Reverse Mortgage loan specialists)

Patterson Lakes

Mobile 0437417042

www.mmfinance.com.au

(Information is correct as at 01.02.25)

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