- May 31, 2018
- Posted by: Rogers Property Group
- Categories: Australian Property Market, Financial Planning, Latest News, Property Investment
The recent budget did not give it much exposure but we have identified the likelihood of a Reverse Mortgage Scheme for people over 65 years old back by the Federal Government.
The pension is becoming such a burden on the Australian Economy that the government needs to find clever ways for people to become self-funded retirees in an attempt to reduce that burden.
Very few people in Australia retire on an income that is at a level of what they would call comfortable. Most are retiring pretty much on the poverty line. Most people go through life as what we would call “unconsciously incompetent”. This means that they don’t know that they don’t know. They don’t know that they have no idea about investment or finances. This is why most people are retiring poor because they have never been show the right way.
The Reverse Mortgage Scheme is aimed at those people who have equity in their homes but have no other assets and are cash flow poor. The loan scheme will allow these people if over the age of 65 to draw equity from their homes and convert that to cash via a government backed loan. This loan will attract an interest rate of 5.25% and is significantly cheaper than other like products on the market. This is set to cost the tax payers of Australia around $11 million over the next 4 years.