Queensland’s Hervey Bay retired homeowner Sharon, wants to stay in the home she loves. It is a “pretty magical area to live in” and somewhere she enjoys having her children and grandchildren come and stay. She’d always looked forward to her retirement years and the freedom to live the lifestyle she loves, joining clubs and groups, going on trips to visit friends and just enjoying life.

However, the reality was Sharon found she was struggling to make ends meet as a widow living on the government pension alone. With the cost of living going up it was “becoming really stressful.” Sharon was checking her bank account all the time, just to make sure she had enough money to do the shopping. And she wasn’t ready to move out of her home yet – not while she was fit and able to look after herself and manage the house and garden, which she loves.

“I’ve got a reasonable sized garden here. Most of it looks after itself. But it does need some work – every garden needs work. But I’m fit enough to be able to do that still, and look after myself from my own home. I love my home.”

Sharon had lived and worked out of the country with her husband for a number of years, so she hadn’t been working long enough in Australia for her superannuation to accrue or build up to anything worthwhile. She started investigating her financial options. A friend, who she knew through church, had a reverse mortgage with Heartland Bank and was extremely happy with it.

“I always maintained that my home was my super, and I just needed to find a way that I could access that equity. So, [a reverse mortgage] fitted the bill really well. I looked at a few different companies.”

Sharon explored the Government’s Centrelink Home Equity Access Scheme, but this didn’t allow her to have the lump sum that she needed to do the things she wanted to do. After researching various reverse mortgage providers, she decided to go with Heartland Bank and said, “I’ve been very happy.”

Sharon used the funds to pay off the remainder of her mortgage and improve her property. She’s also getting some dental work done and planning to take a holiday overseas. And she’s comfortable in knowing that she has equity in her property. So, if and when she needs it, she can apply for additional funds through her cash reserve. “It’s not too much, but it’s a nice feeling. When I spoke to my bank manager about that, he said that was a really good way to go about it, to draw down what I need for now, because that’s all I’m paying the interest on,” said Sharon.

As recommended, Sharon had a conversation with her family about applying for a reverse mortgage. “I’m in the position of having two grown sons who simply just want me to be happy. So, you know, they’re not looking at it as inheritance for themselves down the track – they’re just not money orientated in that sense. So, they were more than happy for me to do this, understanding that there wouldn’t be quite as much inheritance for them as there might have been before. But they just want me to be comfortable and happy – there was absolutely no issues with that. And they love coming up here to visit – they said it’s a bonus for them too because that doesn’t change. There’s still the space and availability for them to come and visit and bring the kids.”

Sharon designed and had her house built specifically for her to live in. “It’s ideal for my kids to come visit and bring the grandkids. If I downsized, I wouldn’t have that space to enjoy. I really did want to stay in my own home and the reverse mortgage has enabled me to do that.”

Taking the pressure off makes life much easier and happier

Since taking out the reverse mortgage Sharon feels happier and healthier. When asked if she had a message for anyone considering a reverse mortgage, Sharon responded:

“If it’s the only option, I would say go ahead. Because thinking about how it’s affected my life, I’m convinced that I am now actually healthier than I was before. I was struggling to make ends meet. Just on the government pension, it was just not happening, with costs of living going up all the time and the pension not meeting that rise. It was becoming really, really stressful. I was beginning to get blood pressure issues which I’ve never had in my life before. Since getting this mortgage and just having that pressure removed, my blood pressure is actually returning to normal.

“I find I can go all week with not checking my bank account and I suddenly realized I haven’t even looked at my bank. Before, it was ‘OK, so I need to go shopping. How much money have I got to spare? Am I going to have enough to buy what I buy, what I’m needing to buy this week?’ It was always this constant balancing act. Whereas now, oh gosh, I’ve got breathing space now. I can go and get something nice for dinner and not have to think twice about ‘oh can I afford to have people come for dinner’. You know, it just takes those pressures off and makes life so much easier and happier.

“I would recommend it to people. I understand that if you’ve got other ways of finding that financial backup without having to pay interest, then that is preferable. But if it’s your last resort, it’s definitely, definitely worthwhile.”