Over 50% of Heartland customers take out a reverse mortgage to use towards home improvements.

Whether the purpose is to make your home more age friendly, build your dream kitchen, or fix up the house prior to selling, a reverse mortgage could be used for almost any home renovation project to meet your retirement goals while still remaining in your home for as long as you choose.

But what could this look like in practice, and will you be able to borrow enough to cover the improvements?

Let’s look at an example from one of our customers, Fred*, who used part of his Heartland Reverse Mortgage for home improvements.

Fred’s case study

Fred owns a unit in Gosford valued at $383,000.

At 71 years old, he applied for a Heartland Reverse Mortgage for home improvements valued at $45,000, and requested $20,000 to use for travel, in total requesting $65,000 as an initial advance.

He did not require any regular payments but requested the remainder to be set aside in a cash reserve facility for future needs.

The total loan amount requested was $65,000 plus the cash reserve.

How much could he borrow?

71 (age) = 31% LVR (maximum potential loan)

31% (LVR) x $383,000 (home value) = $118,730.

Fred was able to apply to borrow $118,730, which meant Heartland could lend him the $65,000 for his initial advance, as their application met our credit criteria, and put $53,730 in a cash reserve facility for unexpected bills or emergencies.

Fred’s reverse mortgage enabled him to complete the home improvements he was hoping for, so he was able to live in his home comfortably, for longer, enjoying the renovation he had been planning.

Want to know more? Find out more about using a reverse mortgage for home improvements or request your free Reverse Mortgage Guide.

Ready to apply? You can now Apply Online, or request an Application Pack that provides everything you need to apply.

If you require any assistance, feel free to get in touch, we are here to help you.

*Names have been changed to protect the privacy of our customers.

Information provided is accurate as of 24 March 2023 and may change from time to time.