There seems to be this myth out there amongst seniors, perhaps set by the banks and commercial providers marketing efforts, that reverse mortgages are exclusively for wealthy people to access the large equity they have in their homes in suburbs like Vaucluse in Sydney or Toorak in Melbourne.
Whilst we can’t speak for the bank and commercial providers, that’s just plain wrong and our experience of assisting seniors accessing the Government’s revised Home Equity Access Scheme (PLS) gives us a unique perspective on which to bust this ‘myth’.
Our market leading online PLS calculator has now been used by thousands of seniors. We recently analysed the anonymised data from the submissions, and identified some very interesting information which is detailed in the infographic below.
When we compared this data to our customers that have applied for the PLS, we saw very similar results to those above with one key difference — the number of PLS applications with existing mortgage debt is higher, which reduces the median ‘net equity’ below $400,000.
So what does all this tell us?
Whilst yes, there are some seniors with $1m+ properties interested in the PLS, the vast majority are everyday seniors who are struggling to live on just the Age Pension alone. This is further evidenced in that 88% of the PLS customers we’ve assisted are electing to take the maximum PLS fortnightly payment available.
To find out if you’re eligible for the PLS, try our PLS Calculator.