Senior
Access
Home Loan
You don’t have to make lifestyle sacrifices to stay in your
home throughout your retirement. A new car or an overseas
adventure – you can enjoy your home and your retirement
at the same time! With a Bank of Melbourne Seniors Access
Home Loan, it’s possible to do both!
The Bank of Melbourne Seniors Access Home Loan is a home
loan designed especially for seniors, allowing you to access
the equity in your home while you continue to live in it.
Information in this brochure is correct at the time of printing and may change without notice. Fees and charges are payable.
Full details of terms and conditions, interest rates, fees and charges are available upon request. All applications for credit
are subject to approval under Bank of Melbourne’s prevailing credit criteria. All new loans and increases are subject to
assessment according to the Bank’s responsible lending requirements. You should seek your own financial advice from your
accountant before proceeding.
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Features at a glance
If you are at least 63* years old, with the Bank of Melbourne Seniors Access Home
Loan you can:
• Continue to live comfortably in your own home and live your life to the fullest.
• Borrow up to $250,000* against the equity you have in your home.
• Benefit from our No Negative Equity Guarantee meaning you will not have to repay
more than the value of your home.**
• Receive the funds in one lump sum, and use the money for any purpose you wish.
• Defer repayment of the loan until the property is sold or all borrowers are deceased.
• Make voluntary payments towards the loan at any time.
* Restrictions apply depending on the age of the youngest borrower, and the location and value of your property.
** Conditions apply.
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Using your equity for your retirement
Many people find that they are not ready to downsize their family home during retirement.
While owning a home means that you possess a valuable asset, you may not have the
funds in the bank to enjoy the small pleasures in life – a holiday, a car, to provide financial
assistance to your family, or perhaps to invest and give you an additional income stream
to supplement your current income.
With the Bank of Melbourne Seniors Access Home Loan, you can simply access the equity
in your home to supplement your lifestyle.
By taking up a Bank of Melbourne Seniors Access Home Loan, you have the comfort and
security of living where you prefer, without making lifestyle sacrifices.
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What is the Bank of Melbourne Seniors Access Home Loan?
The Bank of Melbourne Seniors Access Home Loan is a variable rate home loan that is
secured by a mortgage over your owner-occupied property. You borrow against a portion
of the equity you have in your home, while still enjoying all the benefits of living there. To
be eligible to apply for the Bank of Melbourne Seniors Access Home Loan, all applicants
must be 63* years or older and must own the home outright.
During the term of the loan, all interest charges and other fees and charges are added each
month to the balance owing on the loan. This is known as “capitalisation”, which means that
you pay interest on interest, and the outstanding loan balance increases over time.
Repayment of the total loan amount is deferred until the property is sold or all borrowers
are deceased. When one of these events occurs, the total amount owing under the loan
must then be repaid in full. However, if you wish, you may make payments on the loan at
any time at a Bank of Melbourne branch or via Internet and Phone Banking.
Loan amounts
The minimum loan amount is $10,000 and the maximum loan amount available will
vary depending upon the ages of the homeowners, as well as the value of the property
– see the table below.
Age of youngest applicant
Maximum loan amount*
The lesser of:
63-64 years1
$150,000 or 15% of the value of your home
65-69 years
$150,000 or 15% of the value of your home
70-79 years
$200,000 or 20% of the value of your home
80+ years
$250,000 or 20-25%2 of the value of your home
1
Sydney Metro, Melbourne metro, Brisbane metro, Sunshine Coast, Gold Coast, Canberra metro, Adelaide metro
or Perth metro only.
2
Restrictions on loan amount apply depending on the location of your property.
* Restrictions apply depending on the age of the youngest borrower, and the location and value of your property.
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Here’s how it works
With a Bank of Melbourne Seniors Access Home Loan, you can borrow against the equity
in your home and still continue to live in it. Here’s how:
Example: Frank and Maggie Bentley own their home outright, which has increased
significantly in value over the years and is currently worth $500,000. Frank and Maggie
want to remain in their home, but find that their pension entitlements and savings alone
don’t offer them the cash on hand they need. While their home makes them "asset-rich",
they don’t have the available funds to maintain an enjoyable lifestyle.
Rather than sacrificing their retirement lifestyle, Frank and Maggie discuss their options
with their family and, after seeking independent legal and financial advice, decide to
apply for a Bank of Melbourne Seniors Access Home Loan. Bank of Melbourne values
their property at $500,000 and since Frank is 71 and Maggie has just turned 70, Bank
of Melbourne can lend them a maximum loan amount of $100,000 (20% of $500,000)
leaving them with 80% equity in their home ($400,000).
When the loan is drawn down, the $100,000 is deposited into the Bentleys’ transaction
account to use, as they choose. They want to invest $50,000 to provide an income
stream that will supplement their pension entitlements, and contact a Bank of Melbourne
Financial Planner* to discuss their options. Frank and Maggie also use a portion of the
money for a well-deserved overseas holiday, and leave the remainder in their account to
pay for additional expenses. Frank and Maggie contacted Centrelink to understand any
impacts this may have on their pension entitlements.
With a Bank of Melbourne Seniors Access Home Loan, Frank and Maggie are not required
to make any repayments, but they may do so if they wish. If both Frank and Maggie were to
live in their home for another 20 years and made no payments towards the loan, their loan
balance would increase to $584,035 leaving them with approximately 21% equity in their
home ($158,939), based on the assumptions provided below the graph on the next page.
When Frank and Maggie finally decide to leave their home, or sell their property, or when
both are deceased, the loan must be repaid in full. By this time the property may have also
experienced further capital appreciation.
*Bank of Melbourne Financial Planners are authorised representatives of Bank of Melbourne – A Division of Westpac Banking Corporation
ABN 33 007 457 141 AFSL 233714 ACL 233714, a licensed dealer in securities.
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Bank of Melbourne Seniors Access Calculator
Balance of Loan ($)
1,000,000
800,000
600,000
400,000
200,000
0
0
5
10
15
20
Term of Loan (yrs)
Loan Balance
Property Value
Equity
Note: The interest rate used in this example is 8.80%p.a. which is the prevailing Seniors Access Home Loan variable rate (correct as at
November 2010), and assumed that it remained constant over the entire loan term and the Bentley’s property achieved a capital
growth rate of 2%p.a. The loan balance includes a one-off establishment fee paid at the loan’s outset, and an administration fee
debited to the loan balance each month over the term of the loan shown above.
What should you consider when accessing your home equity?
Before you apply for a Bank of Melbourne Seniors Access Home Loan, we recommend
that you discuss your options with your family. Many family members and adult children
welcome the opportunity for parents to take a Bank of Melbourne Seniors Access Home
Loan. They see it as a way for retired homeowners to gain financial freedom by accessing
the equity in a property they have worked hard for. At the same time, this will have some
impact on your family, so we recommend that you speak with your family before making
your decision.
We also require you to seek your own financial and independent legal advice regarding
your individual situation. This will ensure that you receive the best financial care possible
and assist you to understand any changes in your tax obligations.
We also encourage you to discuss how you will use the funds with Centrelink to ensure
you understand any impacts this may have on your pension entitlements.
To find out more
Simply call 13 22 66 and our friendly staff will refer you to a Bank of Melbourne lending
specialist nearest you for a personal meeting to discuss your options.
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To find out more, just talk to us.
Ask at any branch. Call us on 13 22 66, 24 hours a day.
Ask your lender, our lender can also come to you.
bankofmelbourne.com.au
© 2013 Bank of Melbourne – A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit
licence 233714.
BOM02141 03/13