It's a creepy thought. Over the nest 40 years, the proportion of Australia's population aged 65 years and over will almost multiply. With continual expansion in the cost of healthcare and actual living expenses, and a decreased ability to rely on government assitance, many Baby Boomers are dreading a need to make important downgrades in their lifestyles to fund retirement.



The popularity of reverse mortgages is set to rise, as our population ages. An obstacle to the take up of reverse mortgages is a strong mentality among retirees to want to leave as much as possible to their children.

The downside? The interest on the financial loan can be up to 1 to 2 percent higher than ordinary home debt rates and is gradually added on to the loan over time. But the suitable news is that the financial debt doesn't have to be paid back until the real estate is sold. In most cases, however, kids of retirees would rather see their mum and dad tap into their assets to maintain a high principle of living and general satisfaction than leave a significant fortune to them.

To take some of the pressure level off ageing shoulders, economic institutions are continually exploring products specifically tailored to help retirees. Meet the Reverse Mortgage.

So how does it work? Just as the name says, a reverse mortgage works similarly to a standard mortgage, only it's the lender who pays the homeowner instead of the other way around. The bank or lender will lend a percentage (somewhere between 30 and 50 percent depending on the retiree's age) of the expense of retiree's home as a lump sum, or regular revenues to supplement savings or a pension.

Also known as ?Spending the Kids Inheritance? or ?SKI-ing?, reverse mortgages enable retiring homeowners to release equity in their homes to fund a model of living that would be otherwise out of reach. Using a reverse mortgage is the best solution for retirees to strike into their homes, usually one of their biggest assets, for cash.

"When you work all of your life, you get to retirement and you want to savour what time you've got left," one retiree said.

So whether you dream of a new car, a ship, home renovations or a cruise around the world, find out from your lender if a reverse mortgage could be the ideal solution for you.