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Reverse mortgage opportunity for advisers: Heartland

New Zealand advisers have an opportunity to raise greater awareness about reverse mortgages, as the product becomes increasingly popular in Australia, according to Heartland Bank CEO Chris Flood.

Tuesday, February 19th 2019, 11:47AM

Heartland posted its results for the six months to December, noting a net post-tax profit of $33.1 million, up 6.5% on the same period the previous year. 

The profits were helped by 24.9% annualised growth in its Australian reverse mortgage book, a factor Flood says is down to increasing awareness across the Tasman, and a deeper broker channel. Heartland's New Zealand reverse mortgage book grew by 10.7% over the same period.

"Australia is a more competitive market, and we have been the only player advertising here [in New Zealand] for a while. It also comes down to broker driven-business. Brokers are a bigger part of the Australian market, and retirees are going to them to help solve their problems."

Flood said only a "tiny amount" of New Zealand reverse mortgage business came through advisers, compared to about 70% of its Australian reverse mortgage book. He said this was a clear opportunity for advisers to broaden their product range and have a conversation with retirement age clients. Heartland pays a flat fee of $500 for reverse mortgage referrals, and believes they can help advisers demonstrate their value.

"Unless we're advertising on TV, no-one is advertising this product. Customers may be unaware," he said. "There's a chance for brokers, who can assist their customers with solutions from niche providers like Heartland. There's an opportunity not just to focus on home loans but to meet needs more broadly," he said. 

Flood is confident reverse mortgages will continue to grow on both sides of the Tasman. "We're seeing a great need for this product, which can have a great impact on people's lives. The demographics are compelling. A lot of baby-boomers are heading to retirement asset rich and cash poor, and reverse mortgages can be a way of giving people greater comfort than they might otherwise have."

The results come as Heartland completes a reorganisation, separating Heartland Bank from Heartland Group. The move freed up its Australian reverse mortgage book from New Zealand capital requirement rules. Flood becomes CEO of Heartland Bank, with Jeff Greenslade remaining CEO of Heartland Group Holdings.

Like many smaller lenders, Heartland is eyeing business from the major banks which remain under intense regulatory pressure on both sides of the Tasman. "We may see opportunities develop for smaller banks like Heartland, and our message is to brokers is, we are open to that. A lot of people are under banked, and services offered by the market don't meet their needs," Flood said.

 

 

Tags: Heartland reverse mortgages

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 28 March 2024 9:42am

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