DomaCom’s Senior Equity Release product is set to launch in April 2019 following a rigorous 6 ½ year regulatory approval process and the recent development of an accreditation program for licensed financial advisers.
It is the first investment-based equity release to be launched in Australia that is regulated as a financial product, meaning Financial Planners can now use equity release as part of their advice.
The progress of this product and details on how financial advisers and how Seniors can access it will posted to this page over the coming weeks.
We believe our fractional equity release product will be a viable alternative to the limited options currently available which are mostly debt based such as the reverse mortgage model. Debt models are generally reliant on the availability of short-term global cash to maintain funding, which is mismatched with the longer-term needs of Seniors requiring equity release to fund retirement and aged care needs over the longer term.
The DomaCom fractional model will also facilitate the incremental transfer of property wealth from one generation to another. Ultimately, Seniors will have the benefit of maintaining a reasonable standard of living and not being financially forced to sell and relocate. They will have an ongoing and permanent right of residency in their home and retain the title.
Funding sources for Senior Australians to meet Aged Care Needs
Downsize
Significant transaction and relocation costs
Agent fees, conveyancing, stamp duty
Lifestyle impact of relocating
Family, friend, familiar surroundings
Reverse Mortgage
Not well funded
Availability subject to liquidity of lending markets
Minimal lifestyle impact
Seniors do not need to relocate
Uncertainty about residual equity
What will be left for the estate
Home Reversion Scheme
Limited institutional funding
Only one bank provides this
Restricted postcodes in limited capital cities
Mainly Sydney and Melbourne
Uncertainty of residual equity
What will be left of the estate
Government Pension Loan Scheme
No lump sum available
Limited payments
Equal or less than pension payments
DomaCom Senior Equity Release
Well funded
SMSFs via the DomaCom Fund
Attractive income yield PLUS capital growth
Minimal lifestyle impact
Seniors do not need to relocate
Progressive sale of equity
Provide lump sum or regular payments and fees
Fixed costs
DomaCom’s Equity Release – an elegant solution where the time horizons of both the Investors and the Seniors are more closely aligned.
*Sources: APRA Statistics. Deloitte, Dynamics of the Australian Superannuation System: The next 20 years 2013-2033
