The lending barrier
At 68, the homeowner had a mortgage-free property worth around $1.2m, but modest pension and superannuation income. She wanted to repair her home and help her son purchase his own. Her initial bank assessment could not support the requested $150,000, and she was hesitant about the alternative product suggested to her.
How we approached it
We started with the two purposes: what the repairs would cost and how much family assistance she could reasonably provide. We reviewed her verified income, regular expenses and the effect of borrowing on her own retirement position. The comparison covered conventional lending where repayments could be supported, alongside other equity-access options where appropriate. We explained payment requirements, interest treatment, remaining equity and any future sale or refinance plan, with financial-adviser input on the proposed gift.
The outcome
The objective was a funding plan that helped with the repairs and family support while keeping her own retirement needs in view. If the full $150,000 could not be supported on suitable terms, the plan would prioritise essential work and reassess the gift amount.
What this means for borrowers
An equity-release discussion should start with the person’s goals and budget. A useful comparison explains how each option affects cash flow and the home over time, so the borrower can make a considered decision about both the repairs and family assistance.
Questions about this case
Can a retiree obtain a conventional loan based only on home equity?
Equity does not establish that regular repayments are affordable. The income assessment must work for a conventional loan, while other equity-access products have their own eligibility, costs and repayment or exit requirements.
This is an illustrative scenario comparable to deals we have handled for our clients. Figures and outcomes are examples; lending remains subject to individual assessment.