Retirement should be a time to relax and enjoy life.
Retirement should be a time to relax and enjoy life, but for many Australians, it’s becoming a financial puzzle that’s tough to solve. Despite decades of opportunity for innovation, traditional financial products still don’t provide the flexibility and security retirees need. Superannuation, personal savings, and reverse mortgages each have their drawbacks, often leaving retirees caught between rising costs and limited options.
So why hasn’t the market evolved to meet this growing need? And more importantly, what’s the solution? That’s where Futureproof comes in. Our soon-to-be-released Equity Preservation Mortgage® is designed to do what other options don’t: give retirees access to the wealth locked in their homes without sacrificing their financial future.
Why Financial Institutions Have Fallen Behind
Banks and non-bank lenders in Australia are under pressure. Rising interest rates, shrinking profit margins, and intense competition have led them to focus on traditional home loans. That means innovation in retirement funding has been put on the back burner.
The concept of reverse mortgages, which has been around for more than 30 years, remains largely unchanged. And while they provide access to home equity, they often come at a steep cost – rapidly growing debt that eats away at a retiree’s most valuable asset.
The Problem with Existing Retirement Funding Options
Right now, most retirees rely on three main financial sources, each with its own challenges:
- Superannuation: While essential, many retirees find their super runs out too soon, leaving them financially vulnerable as they live longer.
- Personal Savings: Rising living costs and unexpected expenses can quickly deplete savings, and with interest rates historically low, growing these funds has been tough.
- Reverse Mortgages: These loans unlock home equity but come with a major downside: compounding interest that can rapidly reduce the value of a retiree’s home.
With these limitations, it’s clear that retirees need a better option, one that lets them enjoy financial security without eroding their hard-earned home equity.
The Retirement Funding Product Retirees Actually Need
A truly effective retirement funding product should offer:
- Home Equity Access: With the average Australian home valued at around $1.1 million, there’s significant untapped wealth retirees should be able to use.
- Higher Loan-to-Value Ratio (LVR): Unlike reverse mortgages with restrictive LVRs, an ideal product would allow up to 80% LVR similar to standard home loans.
- No Age Restrictions: Retirement funding shouldn’t be limited by arbitrary age cut-offs.
- Low Risk for Lenders: A product that’s attractive to financial institutions ensures better availability for retirees.
- Equity Preservation: The most critical factor is helping retirees access their home wealth without destroying its value.
Introducing Futureproof’s Equity Preservation Mortgage®
Futureproof is leading the way with a game-changing solution designed specifically for retirees. Our Equity Preservation Mortgage® offers a smarter way to unlock home equity while protecting financial stability.
Here’s what sets it apart:
- Leverages Home Equity: Provides access to the significant value tied up in a retiree’s home.
- Higher LVR (Up to 80%): Offers more financial flexibility than traditional reverse mortgages.
- No Age Restrictions: Makes retirement funding accessible to more Australians.
- Lender-Friendly Structure: Designed to be financially viable for institutions, increasing product availability.
- Preserves Home Equity: Ensures retirees can fund their future while keeping their home wealth intact for inheritance or aged care.
A New Era in Retirement Funding
For too long, retirees have had to choose between financial security and protecting their home equity. Futureproof’s Equity Preservation Mortgage® changes the equation, giving Australians a sustainable, innovative way to fund their retirement without the pitfalls of traditional reverse mortgages.
With a product designed to work for both retirees and financial institutions, we’re closing the retirement funding gap and helping older Australians enjoy the financial freedom they deserve.
Stay tuned: big changes are coming to retirement finance, and Futureproof is leading the way.
