AMP Bank launches retirement-friendly home loan

AMP Bank has unveiled its latest home loan product as a retiree-friendly and flexible option, offering increased control over cashflow and the opportunity to improve quality of life in retirement.

The 10-year interest-only home loan does not require a credit re-assessment halfway through the term compared to other products, and is the first in Australia, according to the bank, to do so.

The bank said in a statement that the loan’s eligibility extends to retirees, pre-retirees, self-employed individuals, investors, ‘rent-vestors’, and both new and existing owner-occupiers.

“In the past 20 years, the number of Australians aged 55 to 64 who own their homes outright has significantly decreased. Consequently, more people are carrying debt into retirement – a trend set to continue,” Michael Christofides, Director of Lending & Everyday Banking at AMP Bank, said.

“While paying off a mortgage early is often advisable, maintaining flexibility and unlocking property equity can be beneficial, especially in the early years of retirement when many underspend out of fear of outliving their savings.

“For some retirees, the reality is that increasing equity in their property offers no felt benefit; instead, they could use additional cashflow to enhance their quality of life.

“Our new interest-only loan is a simple solution designed to provide this optionality and financial flexibility for retirees and pre-retirees.”

The product launch follows the release of several key datapoints cited by AMP Bank that suggest concerns over home ownership and debt in retirement trends have intensified, including:

• Census data from 1991, 2006 and 2021 shows that home ownership, for those aged between 25–39 years has decreased in each successive generation
• 9 in 10 Australians over 50 believe they’ll still be paying off a mortgage in retirement
• 4 in 5 Australians aged 65+ aren’t willing to downsize to pass wealth to their children, yet nearly half of those aged 50+ would consider releasing home equity if they could remain in their home
• 90% of all intergenerational wealth transferral occurs through death inheritance, indicating a lack of retiree spending and financial confidence