Downsize your home and free up equity
Money, money, money …. All the things I could do. If I had a little money...
If you’re an Abba fan, you’ll be familiar with the tune we’re playing here. If not, stay with us because the good news is, it’s not just a rich man’s world in which retirement dreams come true.
Perhaps you’ve started looking at your retirement options, including downsizing to a smaller home. If you’re in the market for a downsizer home, you may well be considering what bang for buck your current home equity can get you. That’s a good thought.
The Lifestyle Communities model lets you buy your new home at 70-80 percent of the median house price. This means you own your own house and still have an enviable lifestyle with cash in your pocket. Find out how much equity you could free up here.
With the Victorian property market reaching new heights after the pandemic, selling the family home NOW will most likely fetch a high price – especially with the RBA looking to raise interest rates in the next year.
As an example, over the past three months, homeowners at Lifestyle Mount Duneed on Geelong and the Surf Coast have leveraged the strength of the equity locked up in their existing homes by freeing up a whopping $243,000 on average.
For relatively new Lifestyle Mount Duneed homeowner Tom Gleeson, the equity between selling his Highton home and downsizing to Lifestyle Communities has helped shore up his worry-free retirement plans.
With the added financial security afforded by leveraging his home equity, he bought the perfect retirement home, and let the travel bug bite.
Three months in to being a Lifestyle Mount Duneed homeowner, Tom knows he wouldn’t have been able to buy the kind of home and lifestyle he has now, in his former neighbourhood of Highton.
“I think it’s a sound economic proposition and there are a lot of benefits,” he said.
“One of the benefits to Lifestyle is that the houses are really well put together. It’s not hard to really like living here.
“It was lovely to be welcomed here and have people come by and say hello, right from day one.”
Despite Abba’s well-known ditty, it’s not all about money. Lifestyle Mount Duneed provides a gateway to new friends, a stylishly appointed new home and fabulous fun for retired, semi-retired and still working over 50s looking to downsize.
If that sounds tempting but you’re a little hazy about your own equity, how you calculate it, grow it, use it, and free it up, we’ve answered some important questions for you:
What is equity?
Put simply, home equity is the market value of your home, minus the amount you still owe on your home loan. For example, if your home is worth $700,000 and you still have $200,000 left to pay on it, then you have $500,000 equity.
How can you use your equity?
You can use your home equity to secure finance for a range of things, such as money to invest in other properties, shares or even home renovations.
When you use your equity to secure finance, you are essentially increasing the amount you owe to your lender and using your home as security.
For this reason, it’s important to consider the long-term impacts of increasing your loan payments, which is why downsizing in your retirement can remove the stress of having to keep up with a mortgage.
How can you unlock equity at Lifestyle Communities?
An “asset rich” approach to retirement may no longer be sustainable or provide a financially viable income stream, so freeing up equity by downsizing could be a good option for you.
For example, the average sale price our homeowners achieved by selling their homes in Belmont, Grovedale and Highton is $753,536. With Lifestyle Mount Duneed downsizer homes starting at $520,000*, our homeowners freed up an average of $243,000 in their home equity.
The financial benefits of over 50s living with Lifestyle Communities are nothing to be sneezed at, and here’s why:
- Bang for buck (beautiful new home)
- Use the proceeds from your existing home to pay cash for your new home
- Pay off any debts (clever)
- Supplement your retirement income
- Zero stamp duty on retirement units (that’s gold)
- Worry free (and darn good fun)
- Make your dream holiday a reality (our favourite benefit!)
Money, money, money
In the Lifestyle Communities world
(sorry, we had to do it)
We’re here to help you figure out the right move, and we’d love to chat with you about what retirement and equity free up could look like for you by making the move to Lifestyle Mount Duneed on Geelong and the Surf Coast. Call us today on 1300 50 55 60 or enquire here
*Price correct as at March 2022.
30 benefits downsizing your home will bring to your life
There are always pros and cons to anything in life. Taking that promotion with more responsibility or staying...
Why downsizing in your 50s is a great idea
Really think about it: how often do you hang out in your spare bedroom? Is your garden growing wilder than you can...