Clinch is making it easier for Australian homeowners — and brokers — to turn their equity into an opportunity.
The non-bank's latest loan product — dubbed Easy Equity — was created for "asset-rich, cash poor" homeowners whose wealth is tied up in their homes. The equity release loan allows homeowners to borrow money against their homes without having to make monthly repayments. Borrowers don't need regular income to qualify and the loan lasts up to two years. And, instead of paying interest along the way, the interest gets added to the loan balance. Borrowers pay everything back at the end, usually by selling the home or refinancing. Homeowners can borrow up to 65% of your home’s value, with loans as big as $3 million.
James Green, chief executive officer at Clinch, said the loans were created because of the growing demographic of aging Australian homeowners who have substantial equity tied up in property, but little to no incoming revenues — and a banking system that rewards younger Australians.
"We are seeing strong demand for short-term, equity-based lending solutions," Green told Australian Broker. "There is a growing cohort of Australians with substantial housing wealth, but limited traditional income streams. As borrowers move through later-life transitions — whether upsizing, downsizing or repositioning assets — traditional income-based lending models often don’t reflect their true financial strength."
Green said there's no strict minimum age threshold on the equity release product, but that the loan is designed "primarily for later-life homeowners," with strong demand from people over the age of 50.
"Eligibility is driven by equity strength and a clear, documented exit strategy, rather than age alone," Green explained.
In addition, the maximum loan-to-value ratio is 65%, and there's no fixed minimum property value. Loan amounts are determined by loan requirements and overall risk profile.
"The key requirement is a strong equity position," Green said. "Borrowers must have sufficient equity in their property to comfortably support the loan and exit strategy."
Driving the growth in the need for equity release products is Australia's aging demographic, many of whom lack regular income streams and are spending longer in retirement amid rising inflation and cost-of-living pressures.
In addition, Green said rising property values have further concentrated wealth among homeowners over the age of 50, even as traditional lenders grow more risk adverse and tighten lending standards. This has made it increasingly difficult for Australians without regular incomes to access credit, fuelling growth in Australia's non-bank lending sector.
"This combination is creating a widening gap between housing wealth and credit accessibility," Green said.
The shift is also creating new opportunities for brokers who understand their clients’ needs and the options available beyond traditional lending.
"Brokers frequently encounter clients navigating retirement, downsizing, upsizing or other life-stage transitions where traditional lending frameworks fall short," Green said. "Clinch Easy Equity is purpose-built for brokers, giving them a transparent, compliant solution for clients with strong equity but non-standard or retirement-stage income profiles."
