Funding aged care costs
An Accommodation Bond Loan is designed to fund the bond payment required when people move into an aged care facility, and/or to fund the ongoing costs associated with aged care.
Some providers of Accommodation Bond Loans allow you to protect your equity. Repayments are not required but can be made at any time. All lenders must provide a “No Negative Equity Guarantee” which means you are protected from owing more than what your property is worth.
Some lenders offer a ‘Protected Equity Guarantee’ up to 20%. This safeguards up to 20% of your property’s value which gives you the security of knowing that you have a guaranteed amount of your equity set aside for the future.
Things to consider about Accommodation Bond Loans:
- This loan caters to retirees by funding the bond payment required to move into aged care accommodation and/or to pay for ongoing costs related to aged
- The loan is available for a term of up to five years
- If you are a member of a couple, the amount you can borrow, is determined by the age of the youngest borrower
Interest is calculated on the daily balance and capitalised to your loan each month in arrears.
No repayments are required during the loan term, however, additional and partial repayments are permitted at any time. Full repayment of the loan is required at the end of the loan term (generally 5 years), or when any of the following take place;
- The mortgaged property is sold or transferred
- Within 180 days after the borrower has left aged care
- Within 180 days after the borrower has passed away, or if there is more than one borrower when the final borrower is deceased
Eligibility requirements :
Residency & Age: You are required to be an Australian citizen aged 70 years and over.