How can I use a household loan?

Australians can now expect to have a healthy, active retirement for a longer period of time and there are many reasons your retirement income may not be adequate. Whether it’s taken a hit in the current environment, or super came in too late to make a difference to your retirement, you may need to improve your retirement funding.

Of late, interest has picked up from self-funded retirees who have found their retirement income negatively impacted by current conditions… people relying on income streams from rent or dividends that have dried up, getting next to nothing from cash in term deposits, or watching their super balance get smashed by volatile markets.

What is a Household Loan?
Household Capital’s Household Loan is a type of reverse mortgage that’s been designed to work within Australia’s retirement system and focuses on improving your long term retirement funding. It can help you access the wealth accumulated in your home to enhance your lifestyle and wellbeing in retirement, without needing to downsize.

How can I use a Household Loan?
A Household Loan can be used to transform your retirement in several ways. Interestingly, most retirees use their household capital for two or more rather than a single purpose, and may include a mix of capital and income. These purposes include:

  • providing a regular income stream through our regular drawdown facility
  • topping up a super or pension account to boost retirement funding
  • paying off an existing mortgage or other debt to free up your cashflow
  • undertaking home modifications or renovations to make your home safe and comfortable for retirement
  • setting up a contingency fund for those unexpected expenses, which can be drawn on as you need it
  • paying large medical expenses
  • buying a new car
  • being the ‘bank of mum and dad’ to help your children and grandchildren when they need it most with a first home deposit or education expenses
  • paying for in-home or residential aged care.


Do I have to take a Household Loan all at once?
A Household Loan can provide a regular income stream, a lump sum payment or both! Household Capital provides flexibility and choice so you can use your money in a way that best enhances your long term retirement funding.

Taking the money only as you need it will minimise the interest accrued over the life of your loan.

Can I use a Household Loan to downsize?
While Household Capital does not loan for short term needs – such as readying a house for sale – we can establish loans for people who need additional funds to move to a new home.

For example, if the new property is better suited to meet your longer-term retirement living needs, a Household Loan can help meet any shortfall between the value of that home and the sale of your current property.

As with all loans, terms and conditions apply.

Case study
Evelyn lives in Highett, Victoria and is a self-funded retiree with assets outside the family home. She owns a holiday house on the surf coast, has a Challenger annuity, and a number of investments.

Evelyn has been drawing $5000 per month from her investments but wanted to decrease this to the minimum drawdown amount to preserve her capital while financial markets remain volatile.

“It’s okay to have assets but you can’t spend them at the supermarket! That’s why I’m looking to draw on my home equity in this time of market turmoil.”

Evelyn is using her household capital to renovate her kitchen and is drawing a regular monthly income so she can preserve her invested capital at this time. 

Whether you need income or capital – or both! – a Household Loan could improve your retirement lifestyle. To learn more, please call them on 1300 622 100 or check out Household Capital’s online calculator to see how they can help you.

Applications for credit are subject to eligibility and lending criteria. Fees and charges are payable and terms and conditions apply (available upon request). Household Capital Pty Limited is a credit representative (512757) of Mortgage Direct Pty Limited ACN 075 721 434, Australian Credit Licence 391876.

Household Capital is a YourLifeChoices preferred partner.

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Related articles:
Do you qualify for a household loan?
Alternatives to drawing on super
Are banks doing enough for retirees?

Written by Josh Funder

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