Macquarie Silver Living

Founded in Sydney in January 1970 as Hill Samuel Australia by three executives, Macquarie Bank was originally a merchant bank. At the time of its inception it was owned by Hill Samuel & Co., London. It became a full trading bank in February 1985, the second private trading bank established in Australia during the twentieth century.

Macquarie took its name from Lachlan Macquarie, an early governor who helped establish Australia’s first bank. He also introduced Australia’s first currency, the “Holey” Dollar, by punching out the centres of purchased Spanish silver dollars and thereby creating two coins, doubling the number of coins in circulation and increasing their net worth at the same time.

The bank today offers more conventional investment and commercial banking facilities as well as selected retail financial services, including the Silver Living reverse mortgage program.

The Silver Living program won a four-star rating from Cannex in their inaugural October 2007 Reverse Mortgage Star Ratings, and was defined as an “exceptional value” by the report.

There are two varieties of the Silver Living loan, based upon interest rates being variable or fixed for the life of the loan. Funds are available as a lump sum, an ongoing regular funds payment, or a combination of the two. Funds can be accessed via Internet banking without a minimum amount requirement.

One option for Macquarie borrowers is the Capacity Maximisation feature, which is a standard feature written into the Silver Living loans. This allows borrowers to access additional funds without redrawing the loan, if it has not been previously drawn down to the full amount. The amount available increases over time.

Macquarie also offers an Aged Care Extension. This can be requested if a borrower elects to use the equity accessed to fund an accommodation bond and move into an aged care facility, and it allows up to an additional two years to repay the loan. The additional time can be used to sell the home, or to delay selling and rather rent it out it in a weak market, or for the pensioner to move back into the home. At the end of one extension, an application can be made for another one.

With the Silver Living program, the loan-to-value ratio ranges from 15% to 40% and varies with the age of the youngest borrower. Up to 20% of the equity can be protected, and if this option is elected at the initiation of the loan then there are no applicable fees.

There is a portability option but conditions apply.

Macquarie offers a no negative equity guarantee, like all SEQUAL members, although this can be broached by a material event of default.

The application fee covers the cost of the initial property valuation. Additional valuations are required every five years, according to the Cannex report, but the cost is not passed on to the borrower.

Macquarie charges no monthly or ongoing maintenance fees. For variable interest rate accounts, partial repayments can be made at any time, or to reduce interest or principal. “Break fees” or early repayment fees may apply to the fixed interest rate accounts.