Using your home equity to fund aged care

The aged care system in Australia can be complex and costly and often circumstances mean that one or more family members may need to move into a specialist aged care facility sooner than anticipated. Or it may be that you are looking for a retirement community to enjoy this new phase of your life with other like-minded individuals.  

Happy man who's taken out home equity loan carries grand daughter
Cool couple enjoying their own home
Regardless of your circumstances, using a home equity release loan to help fund a move into aged care or a retirement village can provide financial stability and flexibility during a significant life transition. Funds can be used to cover a range of facility expenses including any Refundable Accommodation Deposit (RAD), Daily Accommodation Payments (DAP), daily expenses, medical costs and more.
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Inviva is currently unable to accept leased aged care or retirement accommodation as security against your loan (although we are working on it!) so our current loan may best suit those who want to keep the family home or investment property, or where one partner needs to move into aged care while the other partner remains in the home. We also strongly recommend that you seek independent advice from a financial or specialist aged care adviser to ensure that you minimise any impact on your pension and maximise any tax benefits.  

What are the benefits?

Here are some of the key benefits worth considering when looking to use home equity to fund medical expenses or in-home care:

1

Access to funds without needing to sell the family home

You retain ownership of the home affording you the flexibility for one person to stay in the home while the other moves to aged care, or the property can remain in the family until it’s time to sell.
2

Peace of Mind

‍By using a home equity release loan to fund all or part of your aged care costs, you can enjoy peace of mind of knowing that you have everything covered during what can often be a stressful and emotional time for you and your family
3

No Immediate Repayment Required

‍Because the loan is typically repaid when the property is sold, or the borrower passes away, this can relieve significant financial pressure while you adjust to the move to aged care and provide more flexibility as your circumstances continue to change.
In summary, a home equity release loan can be a valuable tool for funding a move into aged care, offering financial flexibility, and ensuring continuous care. With proper planning and advice, this option can help you navigate the transition to aged care with greater ease and security.

However, while using a home equity release loan to fund a move into aged care offers many benefits, it’s essential to carefully consider your long-term financial goals and consult with an independent financial or specialist aged care advisor. There may be alternative funding options that are more cost effective or better suited to your circumstances or needs.

Meet Tom and June*

Tom, 78, and June, 79, have lived comfortably in their family home in Boondall, Queensland, for many years. However, recently Tom's health significantly deteriorated, and they decided it would be best for him to move into a nearby aged care facility where he could receive the specialised care he needs.

However, June wished to stay in their family home rather than downsize, keeping her friends nearby and remaining close to Tom. The challenge they had was how they could afford to do both without selling the family home
Cool couple enjoying their own home
Cool couple enjoying their own home

How Inviva helped

After consulting an aged care adviser, who explained the different funding options for aged care and the impact these would have on their pension entitlement, Tom and June decided to take out a reverse mortgage secured against their home to pay part of the aged care accommodation cost up front.
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With the reverse mortgage, they were able to access $250,000 of the equity in their home allowing them to pay part of the aged care costs up front. This allowed them to pay the refundable accommodation deposit, or RAD, for Tom’s aged care facility without having to sell their home or significantly disrupt their financial situation. This financial solution ensured that Tom could receive the care he needed while June could remain in their family home, close to her husband.
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The decision to use a reverse mortgage provided significant emotional and financial benefits. Tom received the specialised care he required, improving his quality of life. June could stay in the home they cherished, maintaining her independence and staying near Tom. Additionally, they avoided the immediate financial burden of large monthly payments or depleting their savings, preserving their financial stability.

This approach allowed Tom and June to manage a challenging situation with grace, ensuring both their needs were met while maintaining their financial security and peace of mind.
"Using a reverse mortgage was a blessing for us. It’s allowed Tom to receive the care he needs without us having to sell our home. I can stay close to him while keeping the house we love. It has brought us both peace of mind during a difficult time."  - June
* Case studies and quotes are illustrative of and inspired by some of our customers’ experiences.

Why choose Inviva?

  • Expertise & support — our team has years of experience and offers personalised support
  • Transparent costs — no hidden fees, and you know all costs upfront
  • Flexible options — choose how you access the funds - as a lump sum, regular income payment or a line of credit - and enjoy the flexibility to repay early with no early repayment fees
  • Quick access — fast approval and disbursement mean you get funds when you need them
Explore how a home equity release loan with Inviva can help you enjoy a more secure and fulfilling retirement.
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