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ASIC adds reverse mortgage calculator

ASIC has many useful calculators on its Money Smart website, freely available to anyone. They have released a reverse mortgage calculator which works out:

  • How much your debt will increase over time and what this means for the equity in your home
  • How changes in interest rates and house prices could affect the equity in your home

https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/reverse-mortgage-calculator

Many older people who are asset rich (their family home) and cash poor have been turning to reverse mortgages to finance their later years, and this calculator shows how much value might be left in the house. It's worth checking whether the reverse mortgage might do more to compromise the amount left for the children that is generally expected, as with rising longevity and future higher interest rates, it will not be difficult to erode the remaining equity.

 

  •   14 March 2013
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