How equity release can help couples reach a financial settlement

Using equity release to help separating couples reach a financial settlement


COUPLES going through separation or divorce are increasingly electing to unlock the equity in their family home to help with financial settlement terms.


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COUPLES who are negotiating a marriage separation or divorce are increasingly electing to unlock the equity in their family home to assist with financial settlement terms.

Equity release may simplify the asset-splitting process in divorce and provide more flexibility for the couple's financial situation, by allowing one partner to stay in the home while still sharing the property wealth.

However, it is important the solution that the person remaining in the home considers a debt free product to achieve this.

The UK's Financial Times has reported increasing use of equity release among separating couples. The reasons why are not surprising: the UK, like Australia, has experienced a surge in property prices over the last 20 years.

Over 50s and 60s tend to have more valuable assets to split, but they may also find it difficult to find adequate accommodation post-separation due to the high entry level for Australian property.

To further complicate matters, more Australians are entering retirement age with debt - specifically mortgage debt.

Recent findings by the Grattan Institute show the proportion of 55 to 64-year-olds who own their home outright has fallen sharply, from 72 per cent in 1995-96 to 42 per cent in 2015-16.

Meanwhile, the most recent Australian Bureau of Statistics research shows divorce levels rose by 5.2 per cent in 2017.

Without access to equity release, many separating couples would be forced to sell their property. However, some divorcees are now considering their options to keep their connection with the family home.

But there are some important things to consider before using equity release in this manner.

People considering this solution need certainty around exactly how much of the future equity in their home they will keep and the share which will be protected over the long term. Access to a debt free lump sum is crucial, to avoid any nasty surprises in future.

Over the last 18 months, Homesafe has witnessed an increase in the number of customers who are looking for a way to 'pay-out' a spouse.

"Homesafe has worked with a number of homeowners and their family lawyers, to facilitate the payment of funds to an ex-spouse," explains Homesafe Chief Operating Officer, Dianne Shepherd.

"It is often an anxious time for both parties to finalise the agreed arrangements and can be an emotional time as well. Homesafe aims to provide assistance and support to these customers and to achieve a smooth process wherever possible."

Homesafe Wealth ReleaseĀ® is not a loan or a reverse mortgage, but a way to sell a share of the future value of your home and receive the cash you need today*.

With Homesafe, a homeowner enters into a contract to receive a payment from Homesafe now, in exchange for selling a share of the future sale price of their home.

There are no repayments and they remain the owner of their home until they choose to sell.

For more information call Homesafe on 1300 307 059 or visit

*Terms, conditions and eligibility criteria apply. Homesafe Wealth Release is available in 90 per cent of eligible postcodes in Melbourne and Sydney.

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