71, Fit, and Finally Free From the Mortgage Squeeze
Wongawallan is a place I know well. I used to live there myself, and I still have some dear friends in the area. So when a client reached out to me from that part of the hinterland, it felt like more than just another enquiry.
She was 71. Healthy, fit, still working part time as a sole trader, and not remotely ready to slow down the life she had built. But her mortgage, small as it was, had become a weight she could not shake. Every rates notice, every insurance premium chipped away at an income that was already stretched thin. After close to 60 years of work, she was not ready to let go of her lifestyle. Her income just was not giving her the room to enjoy it anymore.
We looked at refinancing first, but the numbers were not going to move the needle much for her. So we sat down and went through her reverse mortgage options properly.
There were a few paths available to her. Part payments. Interest only repayments. Or the option she was most curious about, no repayments at all, with the interest capitalised onto the loan.
That last point matters, and it is worth being upfront about it. With a reverse mortgage, if you are not making repayments, your loan balance goes up over time instead of down. That is the trade off. What it buys you in return is freedom. Freedom to stay in the home you love. Freedom to release some cash flow in retirement. Freedom to travel, renovate, or simply breathe a little easier.
The lending criteria works differently too. Because there is little to no ongoing repayment commitment, the loan to value ratio available on a reverse mortgage is much lower than what you would see on a standard home loan. Part of our job is making sure a client understands exactly what that means for them long term, particularly around protecting their equity. If they ever need to downsize, move into aged care, or sell, we want to know there is no risk of negative equity waiting for them. That protection is built into how these loans are structured, and it is something we walk through carefully with every client considering this path.
We will call her Mary here, to protect her privacy. Mary took her time weighing it all up, asked good questions, and ultimately decided a reverse mortgage was the right move for her. We supported her through that transition, and she is now living the retirement she spent 60 years working toward, in the home she was never willing to leave.
If you are in a similar position, sitting on some equity but feeling squeezed by an income that no longer stretches the way it used to, it is worth having the conversation. There is no one size fits all answer, but there is almost always more than one option.
Kate Sadler
Principal Broker and Owner, The Broker Society
If you would like to talk through whether a reverse mortgage could work for your own situation, you can make an appointment with us, or get in touch with the team to find the right broker for you.
