Reverse mortgage interest rates
When we researched reverse mortgages in Australia in late 2016, we found the following interest rates on offer:
Reverse Mortgage | |||
---|---|---|---|
Minimum | Average | Maximum | |
Interest Rate | 6.19% | 6.25% | 6.37% |
Source: CANSTAR, 2017. Based on a $90,000 loan amount and LVR of 15%, as at 04/01/2017
How do these interest rates compare to the rates on standard Principal & Interest home loans or Interest Only home loans with the home loan providers who also offer reverse mortgages?
Standard Residential Variable | |||
---|---|---|---|
Minimum | Average | Maximum | |
Interest Rate | 3.89% | 4.94% | 5.35% |
Source: www.canstar.com.au, 2017. Based on a $90,000 loan amount and LVR of 15%, as at 04/01/2017.
Fees for reverse mortgages
The fees for a reverse mortgage seem to be very similar to the fees charged on a standard home loan, when it comes to the home loan providers who also offer reverse mortgages.
That is, of course, unless you would like to pay for certain extra features – which are also similar to those available on standard home loans. Based on the products researched, these were the average fees for a reverse mortgage:
Reverse Mortgage Fees | |||
---|---|---|---|
Upfront Fees | Annualised Ongoing Fee | Discharge Fee | |
Min | $695.00 | $0.00 | $328.00 |
Average | $872.50 | $77.65 | $367.00 |
Max | $995.00 | $144.00 | $395.00 |
Source: CANSTAR, 2017.
These are comparable to the average fees for a standard home loan:
Residential Variable Home Loan | |||
---|---|---|---|
Upfront Fees | Annualised Ongoing Fee | Discharge Fee | |
Min | $0.00 | $0.00 | $0.00 |
Average | $546.27 | $65.76 | $257.24 |
Max | $1,463.00 | $400.00 | $1,068.00 |
Source: CANSTAR, 2017.
Alternatively, you can try out our Home Loan Repayments Calculator to get an idea of how much a standard home loan would cost you, excluding fees.
Find an outstanding value reverse mortgage
Different providers offer different interest rates and fees on their reverse mortgage products, meaning the cost can vary greatly between providers. You should always do your homework carefully before making a decision.
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