How Is EquiKey Different To A Reverse Mortgage?
What is a reverse mortgage?
A reverse mortgage is a type of loan that allows you to borrow money using the equity in your home as security. Interest is charged like any other loan and is added to your loan balance. When you decide to sell, move into aged care, or die, the loan, plus interest and fees must be paid off through the equity in your home. The cost of the loan, and subsequently how much equity you or your estate gets at the end of the loan (when your home sells), depends on the interest rate and fees. The main issue is that as the interest compounds, the debt can grow and deplete your equity rapidly.
The example below shows how a homeowner’s equity depletes over the course of 15 years, based on a competitive reverse mortgage taken out by a couple (68 and 70 years of age, respectively) for $150,000.
How is EquiKey different?
With Equikey there is no debt, no interest repayments, and no application or ongoing fees.
You decide how much capital you need or or what percentage of equity to release. Equikey then values this equity based on key factors such as:
the value of your home;
your (and your partner’s) age;
the location of your home;
the type of property you live in;
And the forecast future demand for the property.