‘These renovations allow me to actually enjoy my retirement’

Michael Simonovic has always been careful with money. He’s never had a credit card, prefers to spend responsibly and, outside of his mortgage, has never been in debt. Because of this, Simonovic admits that electing to retire at 59 was a little left of field, but it’s a decision he stands by.

“I loved my job, but there is more to life than work,” says Simonovic, now 62. “I knew I wouldn’t be strong and healthy forever, and to spend my remaining time on mundane routines seemed like a waste.”

After separating from his partner of 30 years, Simonovic considered what he really wanted for his future, and that was starting over somewhere new.

“I wanted to downsize, but in order to sell my home for the best price possible, I needed to complete the renovations I’d stopped and started over the years,” he explains. “That required me to continue working, which would mean sacrificing even more of my time.”

While investigating his options, Simonovic decided a reverse mortgage, such as those offered by providers like Heartland Bank, was the best option to help him to fund the renovations without giving up his lifestyle.

Making equity work for you

Designed for Australians over the age of 55, a reverse mortgage aims to enable you to unlock the value you’ve built in your home to fund future goals, such as home improvements and holidays, or to offset cost-of-living pressures with extra income.

A key feature of many reverse mortgages is that regular ongoing payments are generally not required. Instead, interest compounds over time and the total loan balance is typically repaid when you sell or permanently move out of the property. Depending on the provider, eligible homeowners may access equity as a lump sum, income stream or emergency drawdown.

“A reverse mortgage may help support a vision to finish a home, sell it and move on to a new life,” Simonovic says. “The concept of a reverse mortgage is to make your life’s accomplishments work for you financially and materially rather than sitting on a nest egg.”

Although Simonovic worried his decision to retire early could negatively impact his loan application, he was pleased to find this wasn’t necessarily the case. “The cost of borrowing is always something to consider cautiously, but, in my case, the variable interest rates can be clear and manageable.”

Designed for peace of mind

Simonovic was in no rush to sign up for a loan without conducting his own extensive research.

“Time and time again my cautious nature was presented with facts and calculated projections for all sorts of scenarios,” he explains.

“One of the biggest misconceptions I had was thinking I’d need to hand over my property deed, but a reverse mortgage is not always like that.”

Depending on the provider, a reverse mortgage can come with lifetime occupancy rights, so you may maintain ownership of your property and remain in the home for as long as you choose, provided you comply with the loan terms and conditions. The No Negative Equity Guarantee in Australia also means eligible borrowers generally cannot owe more than the value of their home when the loan is repaid, no matter how the loan balance grows over time.

“It’s easy to lose focus of your goals throughout the bustle and drama of life, but in my experience, investigating a reverse mortgage has allowed me to regain a foothold,” Simonovic says.

To discover more, visit heartlandbank.com.au.

This information is general in nature and does not take into account your personal circumstances. Consider whether a reverse mortgage is suitable for you and seek independent legal and financial advice. Interest compounds over time, increasing the loan balance and reducing the equity in your home. Lending criteria, fees, terms and conditions apply. Heartland Bank Australia Limited ABN 54 087 651 750, Australian Financial Services Licence/Australian Credit Licence 245606.