John (72) and Margaret (70) are a married couple who own their home in Ocean Grove, Victoria.
They have to make payments on an outstanding home loan using part of their Age Pension. This leaves them in an uncomfortable financial position, making it a struggle just to make ends meet.
Home Value: $550,000
Home Loan: $150,000
Net Equity In Home: $400,000
Age Pension Before Pension Boost:$37,014 per/year
Age Pension Plus Pension Boost:$55,520 per/year
Pension Boost helped John and Margaret apply for the Pension Loans Scheme. In their case, they could get an additional $712 per fortnight (or $18,507 per year) to live on.
This would mean they would be able to afford their regular bills whilst also meeting their home loan payments.
Taking inflation into account, they will be able to boost their Age Pension by this amount for 10 years - until John is 82 and Margaret 80.
You get paid fortnightly by the Australian Government
Your mortgage increases by the payment amount + interest
You only need to pay the Australian Government back when you move out of your house or sell it
After 10 years they would still own approximately 45% of their property ($329,000).
If Margaret lived to 90 (20 years), they would still own approximately 40% of their home ($399,000).Note: these numbers assume the value of John and Margaret’s property grows by an average of 3% per year (which compares to the average residential property growth rate for houses in Ocean Grove VIC over the past 25 years of 6.4% per year).
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