We live and learn – and one thing that many senior Australians have learned is that we should be flexible with our expectations.

As young people, our assumption is that our lives will follow the pattern set by our parents or grandparents: get an education, get a job, buy a house and pay it off, build a little nest egg, and then retire.

However, many Australian homeowners retire before they have fully paid out their mortgage. Research by Nine Newspapers found that 54% of 55-64 year olds have a mortgage (compared with 23% in 2002-3) and 13% of those older than 65 have a mortgage (compared with 4%).

That means they have to find money on top of their pension and/or super drawdown to make their monthly payment. And, if you’re one of the millions of Australians aged over 60 still paying off their home loan or other debt, you're no doubt finding that those principal and interest repayments can really stress budgets and reduce cash flows.

Retirees may also find themselves with high credit card balances, car loans, and other forms of debt to service.

That doesn’t have to be the case.

Home ownership puts retirees in a relatively strong position, certainly when compared to their peers who have to pay rent. And statistics show that the percentage of Australians who do own their home will reduce in coming decades.

Even if your mortgage is not fully paid out, the equity you have in your home may be enough for you to consider consolidating all your debt – and you don’t have to take out a conventional loan to do so.

Household Capital’s Household Loan is a type of reverse mortgage that allows homeowners aged 60 and over to access income or capital using the wealth in their home as security.

Interest is charged on a Household Loan like any other loan, but regular repayments are not required until the home is sold or the borrower/s permanently leave their home.

Importantly, the Household Loan is protected under federal legislation, meaning the borrower remains the owner of their home and enjoys 100% of the upside in any ongoing property value growth.

Household Capital’s CEO, Josh Funder, commented, “Since interest rates started moving upward, an increasing number of retirees have approached us to refinance debt.

“Over the past year, nearly 60% of our customers have refinanced some form of debt; in some cases it’s a home loan, in many others it’s a home loan plus credit cards or other borrowing.”

A Household Loan is a retirement-ready mortgage that’s flexible for your future needs:

• You no longer have to make principal and interest repayments.
• Option to make voluntary interest-only repayments.
• Reduces regular loan repayments, improving cash flow and retirement income.
• You don’t need regular income to qualify for a new loan.
• No risk of default, eviction or foreclosure if you miss interest repayments.

Borrowers have guaranteed lifetime occupancy and cannot end up owing more than the house is worth.

For more information, download the free e-guide 6 Ways to Use Your Home Equity or use Household Capital’s Home Equity Calculator to calculate the equity in your home.

Prefer to speak to a real person? Speak with one of Household Capital’s Australian-based retirement specialists for a 15-minute no-obligation call on 1300 699 624. Or book a time that suits you to ask questions and discuss your needs. Schedule a call.