Reverse Mortgages and Aged Care Needs

Residential Aged Care costs in Australia are now assessed using a formula based on your income and your assessable assets, that can include the value of your home.

Instead of selling your home, you can unlock your home equity through an aged care loan to finance your Aged Care costs.

Barry and Annette had been living in their home for 48 years when Barry was assessed as needing to enter Residential Aged Care.  They also had a holiday home valued at $550,000. They needed to pay room accommodation of $450,000 – money that they did not have. Barry was adamant that the holiday home should remain for their family’s use, so selling the home was not an option. Paul arranged an Aged Care loan to meet the Accommodation cost and both the family home and holiday home remained.

For Barry and Annette


They have the funds for Barry to make the move to Aged Care.


They are able to pay quickly, saving substantial interest charges to the aged care facility


They have peace of mind, knowing that they did not need to sell either property.

They have the choice to pay an accommodation payment in part (or full) via a periodic payment to the aged care facility. Both are now regarded as two single people, “couples separated by illness”.  This, and some debt against the holiday home, will see an increased pension for both.

They will continue to own their home and holiday home.
The loan is only due for payment when the second partner leaves the home, and can be refinanced or paid from the sale of the house.

Should Annette move from their home to aged care, a further aged care loan can be provided.

Changes to the Aged Care Act will lead to more outlays for home care and residential aged care. The re-introduction of the Retention Bond (2% of the room cost) plus other means testing increases will lead to more options of paying for care sourced from home equity.

Paul’s advice to families looking to be better informed about aged care has become vitally important when making urgent and conclusive decisions.

Paul provides simple and “easy to understand”​ aged care advice, allowing families to consider all of the options and therefore make an informed decision. Importantly, Paul is qualified to advise on aged care loans and the option to retain the family home and still pay for aged care.

Click here to find out what is possible for you