Reverse mortgage study: Retirees looking for peace of mind

Retirees aren't looking for lavish cruises and tropical vacations; they just want a little peace of mind and the option to stay in their own home, according to a reverse mortgage study.

RBS Reverse Mortgages surveyed 400 retirees in Australia to find out how they used their funds and found that the majority were seeking moderate sums for everyday necessities like home repairs and improvements.

"Forget over-the-top purchases, these are asset-rich/cash-poor people simply trying to make ends meet," says head of reverse mortgages, Martin Lynch from RBS Reverse Mortgages.

The survey found that more than 32% used the payments for renovations, while 18% used the money for income, 15% for a car purchase, 8% for travel, 6% for financially helping family, 4.2% for a rainy day facility and 2.41% for medical bills.

About 98% of reverse mortgagees surveyed would recommend a reverse mortgage to family and friends.

Australia's reverse mortgage industry is worth $2.5 billion, according to the May 2009 Deloitte SEQUAL Reverse Mortgage Study. It is currently growing at 23%. It is estimated that by 2020, 18% of Australians will be aged over 65.