Household Capital has released a new drawdown loan facility to its home equity release product that will allow retirees to receive a regular income stream and lump sum payments drawn from the equity in their own homes.
The new loan facility builds on the Household Transfer product the specialist retirement lender launched in March and differs from the Centrelink Pension Loan Scheme, which only offers a regular income stream to retirees.
Under the facility, retirees can receive income either fortnightly or monthly and Household Capital chief executive Joshua Funder said the addition of a lump sum option was in response to demand from financial advisers helping clients set up their retirement funding.
Funder said the lump sum facility was also designed to address the issue of retirees living longer but having retirement income savings locked up in property assets.
“We find most people looking for a regular drawdown also take a lump sum for a specific purpose, such as renovations, a new car, medical expenses or to provide financial support to children and other family members,” he said.
“There are various expenses which can arise in retirement, so we have developed a flexible funding solution which can be tailored for these individual requirements whatever they may be.”
He said interest in household equity release products was being fuelled by high numbers of people planning to retire with a median household superannuation balance at retirement of about $200,000 but with a median value of home ownership at retirement of $700,000.
