ASIC has issued a reverse mortgage calculator for seniors.

A reverse mortgage allows an older person with assets but little income to borrow money secured against their home, without having to pay back either the amount they borrowed or the interest due until they leave their home or die. Instead, the debt and interest builds up (or compounds) over time.

The calculator shows the effect on the equity in a borrower’s home based on decisions they may make about:

* how much they borrow;
* whether they take an initial lump sum, or arrange regular payments or a combination of both;
* how long they borrow for;
* interest rates and various fees; and/or
* changes in home values.