For generations, the Australian dream has included owning your home outright by retirement. But for many older Australians today, that dream is slipping away. Rising property prices, longer home loan terms, and delayed homeownership have led to a growing number of people entering retirement still burdened by housing debt.
According to the Australian Bureau of Statistics, the proportion of homeowners aged 55 to 64 with housing debt has more than doubled over the past two decades, increasing from 15% in 2001 to 36% in 2021. This trend is expected to continue, with many Australians now taking out 30- or even 40-year home loans, meaning they may still be paying off their housing debt well into retirement.
Faced with the prospect of retiring with mortgage debt, some Australians consider using their superannuation balance to pay off their home loans. While this may seem like a straightforward solution, it can have significant drawbacks. Superannuation is held in a tax-privileged environment, and withdrawing large sums to pay off debt can reduce the income available in retirement.
An alternative to using superannuation is Homesafe Wealth Release®, a debt-free equity release solution designed for homeowners aged 60 and over. Homesafe Wealth Release® is not a loan and does not involve compounding interest charges or regular repayments. Instead, it enables homeowners to access the equity in their home today in exchange for selling Homesafe a share of the future sale proceeds of their home. Homeowners can use the equity ‘released’ to clear the debt and retain their ownership of their home and the right to live in their home for as long as they wish.
Dianne Shepherd, Managing Director of Homesafe, highlights the reasons an increasing number of homeowners are turning to Homesafe for this solution:
“At Homesafe, we understand that retiring with a mortgage can be incredibly stressful, especially if using superannuation feels like the only option. Homesafe Wealth Release® gives homeowners the freedom to pay off their mortgage while keeping their superannuation intact for the retirement they’ve worked so hard for.”
Key Benefits of Homesafe Wealth Release®:
In an environment where an increasing number of Australians are retiring with housing debt, Homesafe Wealth Release® offers a viable alternative to using superannuation savings to become debt free. By accessing the wealth tied up in their homes, retirees can improve their financial security in retirement. As with all big decisions regarding financial matters, homeowners are strongly encouraged to seek financial advice to understand the implications of their decision to proceed with a Homesafe arrangement and all Homesafe customers are required to engage a legal representative to assist them when signing a Homesafe Contract.
The team at Homesafe Wealth Release™ offer a personalised service by phone initially, and a no-obligation meeting with a Homesafe Mobile Specialist in the comfort of their home is organised to ensure the homeowner can receive all the information they – and their family – need to make an informed decision.
For more information on how Homesafe has helped older homeowners to find peace of mind in retirement for over 20 years, contact Homesafe on 1300 307 059 or visit www.homesafe.com.au.
*Terms, conditions, and eligibility criteria apply. Homesafe Wealth Release™ is available in 90% of eligible postcodes in Melbourne & Sydney.
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