Reserve Bank to crack down on reverse mortgages

Controversial "granny mortgages" are facing a crackdown by the Reserve Bank.

The loans - also called "reverse mortgages or equity release" - have been criticised for being capable of wiping out the value of a family home and leaving relatives with nothing. Reverse mortgages work by home-owning seniors borrowing cash against the value of their property with the debt recovered with compound interest when they die or move.

Controversial “granny mortgages” are facing a crackdown by the Reserve Bank.

The loans – also called “reverse mortgages or equity release” – have been criticised for being capable of wiping out the value of a family home and leaving relatives with nothing. Reverse mortgages work by home-owning seniors borrowing cash against the value of their property with the debt recovered with compound interest when they die or move.

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