The decision to move into aged care is never an easy one. But it can be particularly difficult when there are complex, and often expensive, financial arrangements to consider.
An IMB Bank Aged Care Loan can help you unlock the equity in your home and use this money to:
Our Aged Care Loan is designed to allow homeowners – aged 65 or over – to borrow money and use their home equity as security.
The borrowed money can be accessed as a lump sum payment, regular payments or a flexible cash draw facility. You can even request a combination of payment options. For example, you can take a portion as a lump sum, a portion as regular payments and the rest as flexible draw facility. And, you can change your arrangements at any time after your loan has settled; bearing in mind that should you decide, for example, to take more from your flexible draw, then you will need to reduce either the amount of your regular payments, or how long you want them to last.
To help you manage your finances, we’ll show you your available credit on your quarterly statement or you can check anytime through Internet Banking or by giving us a call.
There are some restrictions around how the money can be spent, but it’s generally used to cover the costs associated with a move into aged care.
An Aged Care Loan allows you to use the equity in your home to fund your aged care needs – without having to sell your home. |
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Aged care costs can vary depending on your circumstances, but the primary cost of entering an aged care facility is typically the ‘Refundable Accommodation Deposit’ (RAD) – which can exceed $500,000.
There may also be a range of other costs an aged care resident needs to meet, such as a ‘Basic Daily Fee’, a ‘Means Tested Care Fee’ and an ‘Additional Services Fee’. If an aged care resident elects not to pay a full RAD, there will also be a ‘Daily Accommodation Payment’ (DAP).
Set up an initial draw, monthly draw or flexible draw facility (or a combination of all three) – with the freedom to change your arrangement at any time.
Borrow up to 50% of the security property value on a 3 year term, or up to 35% on a 5 year term (depending on your age – see LVR tables).
Access competitive interest rates and pay no monthly loan account keeping fee.
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|
Variable Interest Rate |
Comparison Rate |
Application Fee2 |
|---|---|---|---|
|
Aged Care Loan |
5.60% pa |
5.75% pa1 |
495.00 (including valuation if security property value under $2m) |
Interest is charged on the amount you borrow, but unlike most other loans, you don’t have to make regular repayments. Instead the interest is added to your loan balance and you will pay interest on interest, plus on any fees or charges added to your loan.
The effect of paying interest in this way, without making any or many repayments, is that the loan balance will increase over time. This will impact the value of the equity remaining in your property.
The loan must be repaid in full (including interest and fees) at the end of the loan term, when the security property is sold, or within 6 months of the last borrower passing away. Partial or full repayments can be made at any time during the loan term.
Before you take out an IMB Bank Aged Care Loan, it’s important you read our Reverse Mortgage Information Statement. This contains more information about how aged care loans work, and the issues to consider in deciding if an aged care loan is right for you, such as:
We require you to obtain independent legal advice and we highly recommend that you seek independent financial advice.
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IMB Bank Aged Care Loan Product Summary |
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|---|---|---|
| What are the interest rates? |
5.60% pa |
5.75% pa |
|
Minimum loan amount |
$20,000 |
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|
Maximum loan amount |
$1,000,000 |
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|
Minimum borrowing age |
65 |
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Maximum borrowing age |
N/A |
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Loan term options |
Up to 3 years or at a |
Up to 5 years or at a |
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How much can be borrowed? (Loan to value ratio) |
Refer to LVR tables |
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Interest rate |
Variable rate that can change at any time (please ask us for further details) |
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Fees and charges |
Please ask us for further details |
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Payment options:
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Payment options are flexible to help you manage your finances. You can change the amount of your payment options at any time after your loan has settled, but remember that any changes may affect the amount of credit available to you in the future. For example, if you access more from your flexible draw it will reduce the amount you can access as monthly draw. Note: we will not tell you when you access more than you requested from your flexible draw so you will need to track your available credit, which can be done easily using Internet Banking, on your quarterly statement or by giving us a call. |
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What is an acceptable purpose for an Aged Care Loan? |
Refundable Accommodation Deposit Daily Accommodation Payment Other Aged Care costs Home repairs Repay existing debts |
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When does the loan need to be repaid? |
The loan will need to be repaid at the expiry of the loan term, upon the sale of the security property, or within 6 months of the last borrower passing away |
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Can you use an investment property as security? |
You can use an owner occupied home or investment residential property as security, provided all borrowers are on title |
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Can the secured property be rented out? |
Yes |
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Can you make partial repayments on the loan? |
Yes |
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Can you redraw from the loan? |
Yes, a redraw is permitted if you have available funds to draw from the loan |
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Can you access your funds online? |
Yes, you can view your account and make online transactions to an IMB account for a flexible draw facility or redraw3 |
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Can the loan be signed under an Enduring Power of Attorney (EPOA)? |
Yes, subject to any limitations contained within the EPOA |
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Does the loan have a no negative equity5 guarantee? |
Yes, neither the borrower or their Estate can owe more than the value4 of the secured property5. |
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Does the loan have a protected equity5 option? |
Yes, in addition to the no negative equity guarantee you can protect up to 25% of the value4 of the security property (with a corresponding reduction in maximum LVR)5 |
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The maximum amount you can borrow is based on:
The age of the youngest borrower dictates the maximum percentage of the security property value that can be borrowed – this is called the Loan to Value Ratio or LVR.
|
Age |
LVR |
Age |
LVR |
Age |
LVR |
Age |
LVR |
Age |
LVR |
|---|---|---|---|---|---|---|---|---|---|
|
65 |
25% |
71 |
31% |
77 |
37% |
83 |
43% |
89 |
49% |
|
66 |
26% |
72 |
32% |
78 |
38% |
84 |
44% |
90+ |
50% |
|
67 |
27% |
73 |
33% |
79 |
39% |
85 |
45% |
|
|
|
68 |
28% |
74 |
34% |
80 |
40% |
86 |
46% |
|
|
|
69 |
29% |
75 |
35% |
81 |
41% |
87 |
47% |
|
|
|
70 |
30% |
76 |
36% |
82 |
42% |
88 |
48% |
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|
Age |
LVR |
Age |
LVR |
Age |
LVR |
Age |
LVR |
Age |
LVR |
|---|---|---|---|---|---|---|---|---|---|
|
65 |
25% |
71 |
31% |
77 |
35% |
83 |
35% |
89 |
35% |
|
66 |
26% |
72 |
32% |
78 |
35% |
84 |
35% |
90+ |
35% |
|
67 |
27% |
73 |
33% |
79 |
35% |
85 |
35% |
|
|
|
68 |
28% |
74 |
34% |
80 |
35% |
86 |
35% |
|
|
|
69 |
29% |
75 |
35% |
81 |
35% |
87 |
35% |
|
|
|
70 |
30% |
76 |
35% |
82 |
35% |
88 |
35% |
|
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Information correct as at May 2018 and subject to change without notice. Lending criteria, terms and conditions, fees and charges apply. For full details refer to IMB Bank’s Reverse Mortgage and Aged Care Loan Terms and Conditions available by contacting IMB. 1. The comparison rate is based on a $150,000 secured loan for a term of five (5) years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. 2. Only payable on settlement. Includes valuation if security property value is under $2m. If security property value is over $2m an additional valuation fee will apply. Other fees and charges may apply. 3. Internet Banking will not be available to the borrower if an attorney is acting for them – in these circumstances, Internet Banking will be available to the attorney but the attorney will not be able to draw any funds using Internet Banking. 4. As determined by an accredited valuer in accordance with the terms and conditions of the loan. 5. Provided the borrower is not in default under the terms and conditions of the loan.