Martin Barry, Vice President and Chief Corporate Treasurer at La Trobe Financial Asset Management, appeared on our radio show last Sunday.
He talked about how many families are caught out by the need to suddenly pay a Refundable Accommodation Deposit or RAD – the main fee paid to move into a nursing home.
These RADs can be up to $500,000 or even more in major cities such as Sydney and Melbourne.
The first thought is often to sell the family home – but this is not an option we always want to take, especially during this stressful time.
But there are financial options available for families who need some breathing space, according to Martin.
Show me the money
La Trobe has developed an Aged Care Loan that lends up to 50 per cent of the value of the borrower’s family home (up to $750,000) for up to seven years.
The loan can be repaid at any time, and the interest rate is not like a credit card – currently it’s 5.60% – while the Government’s DAP interest rate is 5.76% per annum.
Borrowers can also choose whether they pay the interest on the loan each month or let it accrue if cash flow is tight.
Martin says the loan benefits families by offering them time to work out what they want to do and know they are covered financially.
“You can use it as a bridge for say six months, you can use it for a couple of years, or you can rent out the house and use the income to pay the interest on the loan,” he says.
Martin’s number one tip is to seek financial advice – and know there are options available for everyone who needs to enter aged care. To find out more about paying for aged care, visit agedcare101.com.au.
You can listen to the podcast of our interview with Martin below:
Martin Barry, Vice President Latrobe Financial Asset Management – 19.02.17
La Trobe Financial Management is an expert Partner of agedcare101.com.au
