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Plan for a smooth transition to aged care

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:

  • pay a deposit to enter an aged care facility
  • pay ongoing living expenses
  • prepare your home for rental or sale.

How does our Aged Care Loan work?

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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What does aged care cost?

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).

Why choose our Aged Care Loan?

1. Payment flexibility

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.

2. Choice of terms

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).

3. Competitive interest rates

Access competitive interest rates and pay no monthly loan account keeping fee.

How is interest charged?

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.

How is the loan repaid?

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. 

What else should I consider?

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:

  • Will other people living in your home be affected?
  • Will you be able to leave your children an inheritance?
  • Are there alternatives more appropriate for you?
  • Will your pension change?

Do I need to get advice?

We require you to obtain independent legal advice and we highly recommend that you seek independent financial advice.

IMB Bank Aged Care Loan

Product Summary

Minimum loan amount

$20,000

Maximum loan amount

$1,000,000

Minimum borrowing age

65

Maximum borrowing age

N/A

Loan term options

Up to 3 years or at a

repayment event

Up to 5 years or at a

repayment event

How much can be borrowed?

(Loan to value ratio)

Refer to LVR tables

Interest rate

Variable rate that can change at any time

(please ask us for further details)

Fees and charges

Please ask us for further details

Payment options:

  • Initial draw
  • Monthly draw
  • Flexible draw
  • A combination of the above

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.

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

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

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

Can the secured property be rented out?

Yes

Can you make partial repayments on the loan?

Yes

Can you redraw from the loan?

Yes, a redraw is permitted if you have

available funds to draw from the loan

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 redraw**

Can the loan be signed under an

Enduring Power of Attorney (EPOA)?

Yes, subject to any limitations contained within the EPOA

Does the loan have a no negative equity^ guarantee?

Yes, neither the borrower or their Estate can owe more

than the value* of the secured property^.

Does the loan have a protected equity^ option?

Yes, in addition to the no negative equity guarantee you can protect up to 25% of the value* of the security property (with a corresponding reduction in maximum LVR)^

How much can you borrow?

The maximum amount you can borrow is based on:

  • the agreed value of the secured property, and
  • the age of the youngest borrower.

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. 

Aged Care Loan - 3 year term

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%

 

 

Aged Care Loan - 5 year term

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 December 2017 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. *As determined by an accredited valuer in accordance with the terms and conditions of the loan. ^Provided the borrower is not in default under the terms and conditions of the loan. **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.

Why choose IMB Bank?

Established in 1880, IMB has been helping people achieve their financial goals for 138 years. IMB offers a full range of banking solutions including home and personal lending, savings and transaction accounts, term deposits, business banking, financial planning and can arrange a wide range of insurance and travel products.

IMB has a growing branch network throughout the Illawarra, Sydney, NSW South Coast, the ACT and Melbourne. We have a lending specialist in every branch and a team of mobile lending specialists who will come to you. IMB members enjoy access to free automated phone and internet banking and a team of professionals who are just a phone call away at our locally based call centre.

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