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Last Article Uploaded: Monday, January 24th, 7:00PM

Mortgages

Mortgage Rates Daily Commentary
Monday 24 January 2022  Add your comment
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ASB ditches reverse mortgages

ASB’s decision to stop offering reverse mortgages is likely an indication of a lack of demand for the product, a banking expert says.

Friday, August 7th 2015, 6:00AM 1 Comment

by Susan Edmunds

ASB closed its HomePlus reverse equity product to new business from August 3. That leaves only Heartland, HSBC and SBS offering reverse mortgages to New Zealanders.

While new HomePlus applications will not be accepted any longer, existing HomePlus customers can still use the product.

An ASB spokeswoman said since its launch in 2010, ASB HomePlus had been a satisfactory product for the many customers who used it to borrow against part of the equity in their homes. “However, ASB has decided not to continue this niche product at this time.”

Massey University banking expert Claire Matthews said it was a very niche product. “There is a place for it in the market but it is not widespread. There is a lot of misinformation around the product and there are concerns about how it’s used. It’s not suitable for everyone but it is suitable for a small group of people. It is a way of accessible the equity you have got in your home without having to sell it and move. There are limits - you can't access the whole amount of equity... and there is a slightly higher interest cost associated with it.”

Reverse equity products have been suggested as part of the decumulation solution for retiring New Zealanders, especially in areas where house prices are rising strongly.

But Matthews said ASB’s decision likely reflected that the bank had not been able to generate enough demand.

Claire Dale, of the Auckland University retirement policy and research centre, said the expensive set-up costs associated with the loans and the higher interest rate combined to reduce appetite for the product. "With ASB dropping their HomePlus product, there is very little competition in the field, which does not work to the advantage of potential consumers."

 

Tags: ASB reverse mortgages

« HSBC does it againHome loan lending takes lower prominence at ASB »

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Comments from our readers

On 7 August 2015 at 11:09 am 747 said:
...where else can a retired pensioner obtain a Loan..???? The banks just tell you to get stuffed as you do NOT have an income only a pathetic pension....DISCRIMINATION..!!!!

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.60 3.65 4.15 4.69
ANZ 4.79 4.25 4.95 5.35
ANZ Blueprint to Build 2.03 - - -
ANZ Special - 3.65 4.35 4.75
ASB Back My Build 2.29 - - -
ASB Bank 4.60 3.65 4.15 4.69
Avanti Finance 4.55 - - -
Basecorp Finance 5.49 - - -
Bluestone 4.09 4.29 4.86 5.09
BNZ - Classic - 3.65 4.35 4.69
BNZ - Mortgage One 5.15 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Rapid Repay 4.95 - - -
BNZ - Std, FlyBuys 4.95 4.25 4.95 5.29
BNZ - TotalMoney 4.95 - - -
CFML Loans 5.35 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 3.59 4.09 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 5.25 4.25 4.75 -
HSBC Premier 4.49 2.19 2.45 2.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 4.25 3.49 4.05 4.55
Kainga Ora 4.60 4.03 4.68 5.07
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 4.25 4.54 5.20 5.54
Kiwibank - Offset 4.25 - - -
Kiwibank Special 4.25 3.69 4.35 4.69
Liberty 4.84 - - -
Nelson Building Society 4.95 4.29 4.85 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.39 3.54 3.89 4.09
SBS Bank 4.79 3.95 4.49 4.85
SBS Bank Special - 3.45 3.99 4.35
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - 3.45 - -
The Co-operative Bank - Owner Occ 4.75 3.65 4.35 4.69
The Co-operative Bank - Standard 4.75 4.15 4.85 5.19
TSB Bank 5.34 4.09 4.74 4.99
TSB Special 4.54 3.29 3.94 4.19
Unity 5.65 4.15 4.60 -
Wairarapa Building Society 4.99 4.05 4.50 -
Lender Flt 1yr 2yr 3yr
Westpac 5.09 4.29 4.95 5.29
Westpac - Offset 5.09 - - -
Westpac Special - 3.69 4.35 4.69
Median 4.77 3.69 4.42 4.69

Last updated: 19 January 2022 12:41pm

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