Ask Paul: I'm 77, how can I access equity in my home?


Dear Paul,

I'm 77 years old and looking to release some equity in my home, which is worth about  $950,000.

I'm looking to access $50,000-$100,000. What's my best option? - Frank

ask paul clitheroe i need a reverse mortgage

Well, Frank, I would argue that the best reverse mortgage around is Services Australia's Home Equity Access Scheme, which is run out of Centrelink.

The current interest rate on the loan balance is a fantastic 3.95%.

But you may not qualify as you must be eligible for, or receiving, the age pension or other government support. The next issue is that it pays a maximum of 150% of the age pension.

Apart from this, you need to look at the private sector. Here I think you will find that rates are around 9%. This is pretty expensive money.

It will be no problem at your age, as the owner of a valuable home, to get a loan of $50,000 to $100,000. But do you need a lump sum? Would a regular payment, such as one provided by Centrelink, be available to you?

Sure, you could pay a high rate of interest and get this money through a loan.

But let's think laterally. Do you have family members who might be able to lend you this money at a rate closer to a term deposit, say, around 5%. A solicitor could easily document such a loan, ensuring it is all very secure.

Equally, do you need it upfront or a specific amount each year?

I'd take a look at a few reverse mortgages to help you decide. But please don't sign up to a private sector lender without seeing your solicitor.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Ask Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. View our disclaimer.
December 27, 2023 5.35pm

Hi Paul,

Do you think Andrew Barnetts Trading Mastery scheme is a scam ?.it's about $8000 for the trading course I think plus a monthly $65 feei think.