Reverse Mortgages are the most heavily legislated and regulated financial products in Australia and are seen as having some of the strictest consumer protections in the world.
All Reverse Mortgage loans have been legislated by the Federal Government in the National Consumer Credit Protection Act 2009 (NCCP) and are regulated by the Australian Securities and Investment Commission (ASIC)
No Negative Equity Guarantee
The Legislation mandates this legal safeguard, which means that neither you nor your estate will ever owe the lender more than your home is worth when the property is sold, no matter how long you have held the loan. Your other assets (such as savings, superannuation, or other properties) are fully protected.
Payments
A Reverse Mortgage does not need to be repaid until the last borrower permanently leaves the home. This includes death, sale, moving in with children or moving into aged care. The lender can never request payment before this time. However, if a client wishes to make payments, they can do so at no extra cost.
Best Interest Duty
The Reverse Mortgage borrower is also protected by the broker’s Best Interest Duty (BID), which was implemented after the Banking Royal Commission. This means we must act in the client’s best interests and be able to justify that we have done so. This can be audited by ASIC, and we are made to justify our lending choices.
Centrelink Integration:
Reverse mortgage proceeds in Australia are specifically structured to interact with the Age Pension assets test. For example, if funds are used for home improvements on a primary residence, they may not affect pension eligibility, a feature deeply tied to the Australian welfare system.
Projections and Forward Estimates
Under the National Consumer Credit Protection Act, borrowers or their representatives must be provided with these estimates based on the loan parameters. The forecast must provide specific projections using the ASIC-approved calculator.
Independent Legal Advice
ASIC requires all borrowers or their representatives to obtain independent legal advice on the terms and conditions of the Loan Document. A solicitor reviews the loan contract and ensures you aren’t being coerced.
Specific Lifetime Occupancy Protections:
While many countries have similar rules, Australian law explicitly guarantees the right of the borrower to remain in their home for life
Reverse Mortgage Information Statement
Legislation mandates all borrowers, or their representatives, receive a “Reverse Mortgage Information Statement”.
Lending limits
The percentages of property value that may be lent to borrowers are set by ASIC regulation under the NCCP.
AFCA: Australian Financial Complaints Authority.
As brokers, we participate in the ASIC-approved External Dispute Resolution Scheme –
Reverse Mortgages Australia
Your Trusted Source of Reverse Mortgage Advice, Delivery and Support
From the first consultation with us, you can expect experienced, empathetic, specialist advice and a solution tailored to finance your retirement living and personal objectives.
We will ensure any reverse mortgage is sourced from trusted reverse mortgage lenders in Australia and meets your unique goals and your situation every time.
