banks encouraging 'LOE'

[Pandabites]

Perhaps not technically LOE, but just thought I'd let you know what a couple of the big banks are doing here in Denmark...actively encouraging people to use the 'friværdi' (increase in equity) in their own homes to supplement their pension/superannuation...just tap into this and improve your lifestyle ...all over the television at the moment, for the last few months..

Not sure if the same happens in Australia i.e. do the banks actually encourage this widely? From memory no, but then again haven't seen much Australian adverts on tv for a while....

Interesting scenario....

 

[Insan3]

Sounds like a reverse mortgage....

 

[Pablo]

They just like you to encourage you to draw out your equity on anything they don't care what. I have some money sitting in my redraw facility and received a letter from my bank suggesting things I could spend it on like a new car, holiday, swimming pool. I couldn't believe it.

 

[DavidMc]

'Equity mate'!

 

[Boomer]

Does sound very much like a reverse mortgage, also been hearing a lot of adds on the radio for loans that capitalise interest for 2 years letting you pay 5 or 5.5% I think it was then reverting to the normal rate (probably higher than normal).

So yes the banks are encouraging this.

 

[Insan3]

They just like you to encourage you to draw out your equity on anything they don't care what. I have some money sitting in my redraw facility and received a letter from my bank suggesting things I could spend it on like a new car, holiday, swimming pool. I couldn't believe it.

Yup, banks have to advertise to appeal to people. They just want the loans higher to obtain more interest profit That is why they have always advertised using equity to go on holiday, buy cars, etc, etc.

I couldn't imagine seeing an ad/receiving a letter - Have you ever considered using equity to do all those great things in life, like debt recycle, invest responsibly in High Growth Blue Chip Shares and Tax effective investments?

That'll be accepted more than buying a new Commodore and a backyard pool!

 

[dantheman]

I think you'll also find that the government & centrelink will increasingly support these methods to supplement the retirement income, especially with our aging popuplation and the pending retirement of the "baby boomers", many who don't have adequate super since it wasn't there for their lifetime.

Even now centrelink support the situation by providing an advice service directly to borrowers on how to structure reverse mortgages to minimise the impact on centrelink entitlements.

With the baby boomers reaching retirement soon, many may not be satisfied with the pension. Having equity release readily available reduces the pressure on government to support or increase pension entitlements.

It will be interesting to see what happens in several years time when our retired population peaks compared to our working population,