Grace owned a valuable inner-city property but struggled with day-to-day cash flow on a pension. By accessing the equity in her home through a reverse mortgage, she was able to renovate, supplement her income, and continue living comfortably and independently in the home she loves.

Background

Grace was widowed several years ago and continues to live independently in her East Melbourne home with her partner and companion. Her principal residence, valued at approximately $4 million, is her only significant asset. As the family home is exempt from Centrelink’s assets test, Grace qualifies for the Age Pension.

Grace has one adult child who is financially independent. As a result, she has no desire or motivation to preserve the value of her property for estate planning purposes and is instead focused on maintaining her lifestyle and wellbeing.

Pain Point

Despite the high value of her home, Grace experienced cash-flow constraints. She found it increasingly difficult to manage council rates, utilities, and everyday living expenses on her pension alone. The property was also in need of maintenance and modernisation.

Grace wanted to renovate the home to make it safer, more comfortable, and better suited to her long-term needs. Builders quoted $400,000 for the desired renovations, however she did not have access to liquid funds to proceed.

Solution

A $400,000 Reverse Mortgage was arranged, allowing Grace to unlock the equity in her home without selling or downsizing.

The solution provided:

Full funding for the planned renovations, improving the comfort and functionality of the home; and

An additional regular drawdown of $500 per fortnight, supplementing Grace’s Age Pension and easing ongoing financial pressure.

Outcome

By accessing her home equity, Grace was able to remain in the property she loves, complete significant renovations, and reduce financial stress. The additional income stream improved her day-to-day cash flow and enabled her to age in place with dignity, comfort, and independence.