The PLS interest rates is 4.50% pa (current as at 16 November 2020) and it is a variable rate charged on the PLS loan balance at the end of each fortnight until the PLS loan is fully repaid. This compares very favourable to commercial reverse mortgage rates which range from 4.95% pa to 5.85% pa (current as at 16 November 2020).
Whilst you are not required to make any payments of this interest but you can if you wish to and can afford to.
The government does not charge any PLS application, establishment, valuation or similar charges to set up the loan. There are also no ongoing fees and charges with the PLS.
There is a legal charge to prepare and lodge a caveat on the title to your property which is usually in the range of $450 to $650 depending on which State your property is located in. This charge is normally added to your PLS loan at the beginning so you are ‘not cash out of pocket’.
Important: The Pension Loans Scheme (PLS) is NOT covered by the provisions of the ‘No Negative Equity Guarantee’ regulations under the National Consumer Credit Act which have applied to providers of commercial reverse mortgages since 2012.
Pension Boost believes this is an example of ‘double standards’ being applied by the government. The PLS is a reverse mortgage style contract – it is a loan secured via a registered charge over real estate property – generating a commercial return for the government (through the interest rate charged on the Pension Loans less the government’s cost of funding the Scheme), with the repayment obligation deferred until the property is sold. Whilst the government technically classifies the PLS as a ‘welfare payment’, the PLS operates on a similar basis to many of the regulated principals that commercial reverse mortgage providers are legally bound to comply with.
On the basis the PLS is in substance a ‘reverse mortgage’ seniors accessing the PLS should be provided the same ‘no negative equity’ protections as under regulated reverse mortgages.
Pension Boost advocates that the PLS should afford the same senior consumer protections to PLS borrowers as those seniors who choose commercial reverse mortgage solutions.
Support our advocacy efforts by signing our petition to amend the PLS in order to protect seniors and their estates from adverse outcomes in the event of negative equity situations.
A feature within the PLS is the ‘Requested Amount’, which is an amount you can ask to be reserved for you for your future needs (like aged care facilities) or your estate.
Essentially - we take the hassle out of dealing with Centrelink / DVA
We also provide an optional ongoing service to help you remain in control of your Pension Loan and the net equity in your property.
You can learn more in the About Us section of our website
Leave your details below or call us on 1300 BOOSTNOW (1300 266 786).