About the Equity Release Market and SEQUAL

Savings Shortfall

Recently there has been much comment about the ‘savings shortfall’ that many senior Australians can expect to be faced with in their retirement.

This ‘savings shortfall’ represents the difference between the level of income required to support today’s seniors in retirement, and the actual income available from their savings, including superannuation, together with any pension entitlement; the reality for many seniors is that their savings in retirement will simply not last long enough.

The issue has become an increasing focus of many in society, including the Government, senior’s organisations, seniors themselves and their families. The media is challenging the issue with increasing frequency, and there is much debate in the community as to how best to manage the issue.

Support Ourselves

We are encouraged to investigate other means of supporting ourselves in retirement rather than simply relying on the aged pension and whilst peak senior’s organisations can lobby the government with ideas, there is a real need today for many seniors to address this issue for themselves.

There are a number of options, which can be discussed with family, advisers and Centrelink. These can include downsizing your home, borrowing from your family, re-organising your expenses and budgeting; even working again. A new option that is now increasingly being used is to release a portion of the equity in your residential property and have it better support you in retirement.

Senior's Equity Release Options

A Reverse Mortgage is currently the most common Senior's Equity Release Product in Australia.  With a reverse mortgage, you use the equity in your home to borrow money.  You can take the loan as a lump sum, in a regular income stream, as a line of credit or as a combination of these options. 

Home Reversion Schemes are relatively new in Australia.  They are currently only available if you are aged 60 or over and live in certain areas in Sydney or Melbourne. 

With a Home Reversion Scheme, you sell a proportion of equity in your home while you still live there.  You receive a lump sum payment in exchange for a fixed proportion of the future value of your home.

SEQUAL

With the increasing popularity of Equity Release options, the Senior Australians Equity Release Association of Lenders (SEQUAL) has been established. The options provided by SEQUAL members are structured to adhere to a strict Code of Conduct designed to protect you, the consumer.

Whilst, the option of accessing the equity in your property during retirement has been available since the late 1980’s, the recent attention and popularity of such products is attracting many more Equity Release products into the market.

For many seniors it is a matter of simply wanting to stay in the home and community they know and enjoy, as they continue to live longer lives.

The purpose of this website is not to recommend any particular option. The aim is solely to help senior Australians understand the mortgage option and provide contact information for those Equity Release providers who are members of SEQUAL, and so assist seniors in making an informed and sensible choice.