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How is EquiKey different to a reverse mortgage?

This is an estimate only. You may end up with more or less equity in your home. Based on a $1 million dollar home, assuming a lump sum reverse mortgage of $150,000 at 7% interest and 1% house price inflation.   Source: moneysmart.gov.au/tools-and-resources/calculators-and-apps/reverse-mortgage-calculator

This is an estimate only. You may end up with more or less equity in your home. Based on a $1 million dollar home, assuming a lump sum reverse mortgage of $150,000 at 7% interest and 1% house price inflation.

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

A reverse mortgage (illustrated above) is a type of loan that allows you to borrow money using the equity in your home as security. Interest is charged just like any other mortgage (although it is typically higher than a standard mortgage rate) and is added to your loan balance. When your home is sold, the principal, plus the accrued interest and any fees must be paid back first. The cost of the loan (interest rate + fees) affects how much equity you will be left with - or in other words, how much money you will receive from the sale of the property. The main reason reverse mortgages have a bad reputation is because as the interest on the loan compounds, the homeowner’s debt grows - and thus their equity diminishes. This can happen quite quickly and without the homeowner necessarily being aware of how much equity they actually own.

With EquiKey, there is no debt, no interest repayments, and no application or on-going fees.

EquiKey works just like a regular real estate agent, except instead of selling your home and having to move, we sell a percentage of the home’s equity. This means you can continue to live in your home, rent and debt-free, but with added bonus of having a little more in your back pocket.

When you’re ready to sell your home, decide to move into aged care, or pass away we can help you sell the rest of your home (to your investor or to the open market) or buy the remaining percentage back from your investor.

Below you can see exactly how EquiKey compares to a reverse mortgage using the same assumptions as above. At the end of year 15, assuming 1% house price inflation, the equity in your home would be worth $931,074 with EquiKey versus $614,336 with a reverse mortgage. That’s a difference of $316,738!

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See how much equity you could release from your home, completely debt free!