Although it is just a bit more than halfway through 2018, we can already say that this year is a big one for the Reverse Mortgage industry. With tighter government regulation, expansion of Pension Loan Scheme (PLS), and the growing market demand, the Reverse Mortgage niche is still a vibrant and stable industry.

Government Reverse Mortgage Review

In late 2017, the Australian Securities and Investments Commission (ASIC) has conducted a surveillance exercise on Reverse Mortgages to test the compliance with responsible lending obligations, measure consumer understanding of the products, borrowing experiences and outcomes.

Aside from scrutinizing Reverse Mortgages, ASIC is also monitoring the provision of financial advice to the elderly.

This only proves that Reverse Mortgages are one of the most heavily regulated financial product in Australia, which is crucial to protect the interest of our customers.

Government Reverse Mortgage Expansion

While the Australian government tightens the regulation on private Reverse Mortgage providers it is now expanding its own equity product for Australian seniors with full age pension entitlements.

As part of the 2018 Federal Budget, eligible seniors can access the government funded Pension Loans Scheme at a max of $17,800 annually starting 1 July 2019 if legislation passes.

The Australian Government has been offering the Pension Loans Scheme through the Centrelink as a voluntary reverse equity mortgage for older Australians who need to supplement their retirement income.

[ Related Post: Pension Loans Scheme Extension Benefits Age Pensioners But Still Limited ]

At Seniors First, we see this government program as a validation of our efforts to promote Reverse Mortgage as a way for senior Australians to live a better retirement. The recent expansion further attests to the benefits of unlocking home equity to fund needs during retirement age.

Current Private Reverse Mortgage Lenders

As of press time, the following companies are offering Reverse Mortgage products in Australia:

  • Bankwest (Seniors Equity Release)
  • Commonwealth Bank (Equity Unlock Loan)
  • Heartland Seniors Finance (Reverse Mortgage)
  • P&N Bank (Easy Living Access Loan)
  • IMB Bank (Reverse Mortgage)

As a leading Reverse Mortgage broker, Seniors First works with many of the providers mentioned above.

Some Banks Withdrew Their Reverse Mortgage Products

Despite the growing demand for Reverse Mortgage loans in Australia, some lenders decided to drop their home equity products.

Macquarie and St. George both withdrew their Reverse Mortgage loan product in 2017.

St. George announced last year that Westpac (owner of St. George bank) reviewed their suite of home loans to simplify their systems and increase productivity in operations.

[ Related Post: St. George Reverse Mortgage No Longer Available ]

Aside from the withdrawal of Reverse Mortgage and equity release loan products, St. George also discontinued its equity access low documentation loans and some fixed rate low documentation home loans. 

(It is important to take note that this move from Westpac does not only affect Reverse Mortgage products. The bank also discontinued or repackaged other financial products such as insurance and home loans as the bank tries to adjust its lending criteria to changing market conditions).

Growing Market Demand

While some lenders have dropped their Reverse Mortgage offerings, the need by seniors Australians for home equity release products still persists and is in fact growing.

Australians are becoming more aware of Reverse Mortgage, and they usually turn online to learn more about this financial product.

According to Google Australia search traffic, the keyword “Reverse Mortgage” has around 2900 monthly search volume.

Meanwhile, the keywords “Reverse Mortgage loan” and “Reverse Mortgage calculator” has 590 and 390 monthly search volumes respectively.

Popular keywords also include ANZ Reverse Mortgage, NAB Reverse Mortgage, and Reverse Mortgage westpac.

People also search for Bendigo bank Reverse Mortgage but in fact, this refers to the Homesafe equity release product that is typically available in Sydney and Melbourne.

Ask Me About Reverse Mortgages

Just like other financial industry in Australia – banking, insurance, property loans – Reverse Mortgage is undergoing some change. Most of these changes are positive, and given that Reverse Mortgages have been offered since 1992, the market is now quite mature.

If you are interested to learn more about Reverse Mortgages, you can reach me at 1300 745 745 or you can post your comments below.

Regards,

Darren

6 Comments

  1. Helen Hall-Reply
    August 15, 2018 at 12:59 pm

    Interested in keeping up to date with options for reverse mortgages

    • August 28, 2018 at 12:30 pm

      Hi Helen, thanks. We will ensure you get our Reverse Mortgage news letter. Regards, Darren

  2. Michael Watson-Reply
    August 16, 2018 at 5:04 pm

    I would like to know more about reverse mortgage loans and for what purposes the funds may be used for. I am aged 66, own my unit in Kingaroy valued around $200.000 unencumbered and am on aged pension. Thanks.

    • August 28, 2018 at 12:28 pm

      HI Michael, thanks for your email. It may be possible to obtain up to $40,000 in your case with one reverse mortgage lender, based on the info provided. You can use the Reverse Mortgage Loan funds for any worthwhile personal purpose. For more info, please call Seniors First Reverse Mortgage Broker on 1300 745 745

  3. Ken Wills-Reply
    August 18, 2018 at 10:52 am

    Hi DARREN ! what % of the value of a fully owned house [value $2.5 m.] ,could be borrowed as reverse mortgage.Single ,no other assets or income other than full aged pension .Thanks Ken

    • August 28, 2018 at 12:26 pm

      Hi Ken, thanks for the question. The amount of home equity you can release with a reverse mortgage will be determined by your age. Criteria varies between lenders, but if you’re 60 then 15% is the max, if you’re 75 you can get 30%, and at 90 you can get 45%. Taking the average age of reverse mortgage borrowers as 71, you could possibly access about $650k in this scenario. Please note all info in this comment is general in nature, should not be relied upon for advice.For more detail, please email directly to info[at]seniorsfirst.com.au or call 1300 745 745 Cheers, Darren

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