Security for the loan

A debt arising from a loan is secured by a statutory charge over a person's real assets. The applicant is responsible for the cost incurred by the Commonwealth in placing the charge.

The person has the option to pay the costs up front or to add them to the total loan amount. The subsequent cost of removal of the charge is also borne by the person or their estate upon their death.  Legal Services and Audit Branch are responsible for the placement and removal of a charge on behalf of the Commonwealth.

Rearrangement of assets

A person may wish to rearrange their assets and consequently it may become necessary to remove the charge from one property and place it on another. The associated costs of such a change are the responsibility of the person and can be added onto the loan debt. The rearrangement of assets is not an impediment to continuing in the scheme provided the property's value is sufficient compared with the continuing level of debt to allow continuing participation in the Home Equity Access Scheme. If the property value offered as security is insufficient, the person may need to make a repayment of part or all of the outstanding loan balance to allow continued participation in the scheme, or their participation in the scheme will need to cease.    

If an officer has doubt regarding the security of a debt

Where doubt exists regarding the security of the debt or there are legal issues impacting on such security, details of the case should be referred to the Policy Development Branch for direction.