In Retirement Income on Tuesday 31st Aug, 2021

Stay in your home longer! How to fund home renovations so you can stay there longer

Aug 31, 2021
A reverse mortgage could fund your home renovations to help you stay there longer. Image source: Getty

Accessing the wealth tied up in your bricks and mortar is one option to boost your retirement finances, and there are different ways you could do this. One way is to sell your home and downsize to a smaller property. Alternatively, if you want to stay where you are, you could use a reverse mortgage to tap into your home equity.

Moving or staying?

Moving house is a big project that brings plenty of challenges and stresses. Packing up your life and loading it into the back of a removal van is a big deal – physically, mentally and emotionally – especially if you have been living in your home for many years or even decades and have a lot of family memories tied up in the property. And, if you’re selling, there’s a whole process to go through in terms of preparing your home for sale, researching and agreeing upon an asking/reserve price for the home, finding a real estate agent, auctioneer and conveyancer and then paying the relevant fees related too these, along with any mortgage release fees (if you still have a mortgage with a lender).

If you are well-settled and happy in your current location, but want to hire the in-home care of your choice and/or make some modifications to enhance safety around your property, you may find that a reverse mortgage is the answer, and nowhere near as complex or as daunting as you might have thought.

A safe form of equity release

A reverse mortgage is a safe form of equity release specifically designed for older Australians. It lets you access some of the value in your biggest asset – your home – to do a range of things, for example, to:

  • Pay off an existing mortgage
  • Renovate or modify your home to make it safer and more comfortable for retirement
  • Choose your own in-home care service and tailor it to meet your needs
  • Create a contingency fund for those unexpected expenses, such as medical bills or a new roof.

Spending more time at home

If you are retired, you’re likely to be spending a lot more time at home, so it should be as practical and comfortable as possible. You also need to stay on top of maintenance issues and, as you get older, you may need to think about some modifications, such as:

  • Do you have stairs? Are they manageable?
  • Are your oven, microwave and washing machine at the right height?
  • Are your wet areas appropriate, with a shower or bath that’s safe to get into and out of?
  • Are your kitchen, bathroom and laundry taps easy to operate?

Even if you are fine now, you may need modifications to your property to stay secure and comfortable and maintain your independence and quality of life as you get older. These adjustments, however, can end up costing tens of thousands of dollars.

Using a reverse mortgage to fund home modifications

You can use the money from a reverse mortgage to make improvements to your home, which is an exempt asset for Centrelink benefits.

Solar panels for the roof could cost $5,000-$10,000, including installation. A new bathroom is likely to be $12,000-$20,000, and a new kitchen, including all new appliances, could be $20,000-$30,000.  A stair lift could cost $5,000-$10,000 or more.

Many older Australians don’t have this kind of money freely available, but if you own your own home, or even if you still have a small mortgage, you can benefit from a reverse mortgage. You can use a reverse mortgage to refinance your current home loan and fund your home improvements.

Paying off your existing home loan

You can also use a reverse mortgage to refinance an existing home loan.

The big difference between a reverse mortgage and a standard home loan is that you don’t have to make monthly repayments with a reverse mortgage. Repayment of the  principal and interest is deferred until the end of the loan, although most providers allow you to choose to make interest only or other repayments at any time without penalty.

If you are living on a fixed income, like an annuity or the Age Pension, this change can be a huge benefit to your mental wellbeing, as you don’t have to worry about paying the mortgage every month.

Saying yes to enjoying the good things in retirement – a real-life case study

Vivienne Cable is a 75-year old Sydney-based retiree who successfully ran her own retail business in Sydney’s Chatswood. As the business’ owner, however, she was not an employee and didn’t contribute to her superannuation for many years. When she retired, she had about $100,000 in superannuation and owned her unit mortgage-free.

“I found I was being very cautious,” she says. “I was terrified of having to take money out of super and having it dwindle. I didn’t want to have to think about where money was coming from for things, like ‘what if I need to change the car or fix something in the apartment?’”

Vivienne released some of the equity in her unit using a Household Loan, a reverse mortgage offered by Household Capital. She used the proceeds to make improvements to her unit. “I’ve also had fans installed, repositioned some lights and re-carpeted and re-painted my apartment,” she says.

Vivienne Cable used a Household Loan to fund home improvements and stay there for longer. Image source: Household Capital

A Household Loan is a very flexible product. It allows you to access your home equity as a lump sum or monthly income, or a combination of both.

As a reverse mortgage, a Household Loan comes with a range of strong consumer protections,  including a guarantee that you will never owe the lender more than the value of the property (a situation known as “negative equity”).

Ageing well in your own home

Even if you qualify for free or subsidised home support services, like a carer or a nurse, it’s empowering to know that you can afford extra help, such as taxis, gardening, cleaning or meal delivery. Or maybe private health insurance is really important to you, but it’s expensive.

You can use the money from a Household Loan to pay for these services and you can also put some money away to provide for your future in-home comforts and care.

A Household Loan can make all the difference to your retirement lifestyle now and in the future, and allows you to stay in your own home for as long as possible.

At any age, you need confidence in your financial future. A Household Loan is one of the ways you can have some extra choice and flexibility so you can live well at home.

HOUSEHOLD CAPITAL INFO Important information. Applications for credit are subject to eligibility and lending criteria. Fees and charges are payable, and terms and conditions apply (available upon request). Household Capital Pty Limited is a credit representative (512757) of Mortgage Direct Pty Limited ACN 075 721 434, Australian Credit Licence 391876. HOUSEHOLD CAPITAL™, the Star Device and Household Capital and the Star Device are trademarks of Household Capital Pty Ltd.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.


Most Australians want to spend their retirement years at home, but it’s important to make sure your home is safe and comfortable now and in the future. You can use your home equity to fund renovations or modifications. Try our easy-to-use calculator to see how much home equity you could access.


Are you planning to make modifications to your home so you can stay there longer? How will you fund this?

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