A new home loan product has been launched, tailored to the needs of mature aged Australians
AFG Home Loans has recently launched an innovative home loan product for mature aged Australians looking for more flexible repayment options.
Retro Thrive, is the first long-term interest-only product helping mature aged Australians free up cash flow from their investment properties. It works by enabling interest-only payments throughout the full loan term.
Designed for people aged 50 and over, Retro Thrive is the first long-term interest-only product of its kind. This new offering caters to investors who previously haven’t met the bank’s criteria for a home loan solution that meets their specific needs.
With flexible repayment options, Thrive enables customers to choose an interest-only (IO) repayment schedule over a 40-year term without repeatedly applying for extensions, ultimately providing more options to hold these assets longer term into retirement.
Thrive allows borrowers only to pay the interest charged on the loan amount, and the principal remains unchanged until it’s discharged upon selling the property or at the end of the loan term*.
Thrive borrowers can borrow up to a maximum of 65% of the value of their property or $2m (whichever is lower). This may assist borrowers to free up some of their cash flow to spend on the things they’ve worked hard for over the years such as holidays, or home renovations.
Key points:
• Available for Australians 50+
• Up to 40-year loan term (IO for the entire term)
• Maximum LVR of 65%
• Max loan size of $2m
• Applicants must have a clean credit history
How does it work?
A Retro Thrive interest only mortgage functions in a similar fashion to a standard interest-only mortgage, where you only make monthly interest payments. This can make it more accessible than a full repayment mortgage, as affordability calculations are based solely on the interest payments, not principal and interest combined. For example, with a $300,000 loan and an interest rate of 7% over 25 years, the interest-only option would cost approximately $1,750 monthly, while a principal and interest repayment mortgage would amount to $2,120 monthly. This flexibility is advantageous if you have a lower income, especially during retirement.
Unlike regular interest-only mortgages, a Retro Thrive mortgage doesn’t require a separate repayment plan. The agreement already assumes that the property will be sold to discharge the debt upon selling the property or at the end of the loan term.
Questions?
If you’ve got questions about how this works or if you will qualify, please get in touch. With banks always jostling for new customers, it is a really smart decision to use an experienced Perth mortgage broker to help you consider your options, negotiate with lenders and simplify the home loan process. We’d love to hear how we can help you, please contact us for an appointment today.
You can read more about this reduced buffer home loan here.
*Please note this information is general. The terms and conditions of particular loans differ. Information is correct as at 1 September 2023 and is subject to change. AFG Home Loans lending criteria, terms, conditions, fees, and charges apply. Full details of terms & conditions available on application.
**Please note, we do not provide tax, legal or accounting advice. This content is for general informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. We encourage you to consult your own tax, legal and accounting advisers before engaging in any transaction.
