Document ID: chunk:federal_register_of_legislation:F2024C00882:reg:28lc:p2
Version: federal_register_of_legislation:F2024C00882
Segment Type: reg
Provision Reference: reg 28LC (pt 2/2)
Character Range: 195289–196482

and
 (b) at the time the credit contract is entered into, the youngest borrower under the reverse mortgage is 55 or younger; and
 (c) the loan to value ratio of the mortgage is higher than 15%.
 (7) A circumstance in which a credit contract is unsuitable unless the contrary is proved is that:
 (a) the credit contract is part of an arrangement that is a reverse mortgage; and
 (b) at the time the credit contract is entered into, the youngest borrower under the reverse mortgage is older than 55; and
 (c) the loan to value ratio of the mortgage is the sum of;
 (i) 15%; and
 (ii) 1% for each year that the borrower is older than 55.
Note: Examples of unsuitable loan to value ratios are:
(a) if the youngest borrower is 60, a loan to value ratio that exceeds 20% is unsuitable unless the contrary is proved; and
(b) if the youngest borrower is 70, a loan to value ratio that exceeds 30% is unsuitable unless the contrary is proved.
 (8) In this regulation:
loan to value ratio, in relation to a reverse mortgage over a reverse mortgaged property, is:

where:
A is the amount of credit owed under the credit contract for the reverse mortgage.
B is the value of the reverse mortgaged property.