We've found that 40% of retirees approaching Pension Boost to assist with Pension Loans Scheme (PLS) applications still have mortgages. Retired couples applying for the PLS with pre-existing debt were servicing median mortgage amounts of $158,000 at a median age of 72 years.
The PLS is a government-backed reverse mortgage scheme for retirees to draw down extra cashflow from the equity in their homes, without affecting their Age Pensions. This statistic shows the financial strain that many retirees are living with and it's hoped that many will investigate PLS as a way to ease the burden of a mortgage in retirement.
“The PLS option is worth considering for all home-owning retirees but may have extra appeal to those who still have a mortgage to pay and may use this scheme to keep their homes if under mortgage repayment pressure,” said Paul Rogan, Pension Boost Founder.
|Median mortgage amounts of retirees applying for PLS with Pension Boost|
Pension Boost case study of mortgaged retiree couple with debt
John & Margaret's Story
John (80) and Margaret (77) are a married couple who own their home in Ocean Grove, Victoria but have a loan outstanding that helped their kids get on the property ladder.
They have to make payments on the home loan from their part Age Pension. This leaves them in an uncomfortable financial position, making it a struggle just to make ends meet.
Home Value: $650,000
Home Loan: $150,000
Net Equity in Home: $500,000
PLS payments per fortnight: $750 (note: maximum of $1,154)
Duration of PLS payments: 18 years
Net equity after 20 years: 27%
Pension Boost helped John and Margaret apply for the Pension Loans Scheme. In their case, they could get up to an additional $1,154 per fortnight (or $30,012 per year) to live on but decide that they would be able to afford their regular bills and their home loan payments with $750 per fortnight ($19,500 per year).
Use our calculator to find out how Pension Boost could help you increase your cashflow to live a more comfortable life in retirement.