Nearly 80 per cent of Australians aged 60 and over have heard of reverse mortgages but as few as 40 per cent understand the basic premise of the product, according to Sequal.
Released today, the ‘It’s on the House Sequal-RFI Reverse Mortgage Study’ found that this lack of financial education about the product was “holding senior Australians to ransom” in their retirement.
“Overwhelmingly, the study revealed that retirees are not sure what options are available to them to release equity from their home,” said executive director Kieran Dell.
Despite a third of retirees expecting to rely on their home as a source of retirement income, many senior Australians feared myths and misconceptions about reverse mortgages, including falsely believing that they would lose their home title or pension benefits, he said.
“In fact, 28 per cent of seniors held the incorrect belief that a reverse mortgage involved selling a portion of the house to the bank in exchange for money, or that the loan involved compulsory repayments until the borer passed away.”
