Commonwealth Bank has today announced that it is removing the monthly account fee for thousands of seniors who unlock the equity in their home after retirement.
Customers who have the Equity Unlock for Seniors (EQFS) loan will have their monthly account fee of $12 removed, effective immediately.
The EQFS product, commonly known as a reverse mortgage, allows seniors who are 65 and over to access the equity in their home to supplement their income, without limiting their lifestyle or selling their home. Commonwealth Bank has more than 12,000 seniors who are currently accessing the product.
Analysis of customer feedback shows that concerns regarding this account fee are raised more often than many other home lending products.
Commonwealth Bank Executive General Manager of Home Buying, Dan Huggins, said that the bank is removing the fee to make the accounts more affordable for seniors.
“We know that seniors using this product often find the fees difficult, which is why we’ve listened and taken action.
“Many of these customers are seniors enjoying their well-earned retirement and we believe that removing extra costs like this from their budgets will be warmly welcomed,” Mr Huggins said.
National Seniors Australia today welcomed the CBA’s move to reduce the costs of reverse mortgages for older Australians.
National Seniors Chief Executive, Dagmar Parsons, said many seniors wanted to remain in the homes and communities where they’d raised their families, and reverse mortgages were one way they could access the equity in their house to help fund their retirement lifestyle and aged care support services without selling up and moving.
“We know many older people are reluctant to leave the homes they’ve lived in for years and sometimes decades,” Ms Parsons said. “We support moves like this one that will assist them to stay in familiar surrounds in comfort, rather than being asset-rich and cash poor.
“We encourage other providers with similar fees to get rid of them, too.”
CBA customers will be directly informed of the changes to their fees via their next statement.