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Heartland hails reverse mortgage growth

New Zealand retirees are increasingly turning to reverse mortgage options, according to Heartland Bank, after the lender's New Zealand reverse mortgage book grew by 11.4%.

Friday, October 4th 2019, 1:50PM 2 Comments

Andrew Ford, deputy chief financial officer and head of retail at Heartland Bank, says the lender is seeing "strong demand from retirees who want a more comfortable lifestyle". 

Ford says customers are turning to reverse mortgages to pay off other debts, provide a little bit more cash for a better retirement, refinancing, travel and home improvements.

He believes the perception of reverse mortgages is beginning to change, with the option no longer seen as "one of last resort", but a way of unlocking a bit of extra cash in retirement.

"Most of our customers don't want anything extravagant," Ford says. "It might just be an extra $500 a month to take the grand-kids out."

Heartland's gross finance receivables for reverse mortgages in NZ grew to $561.2 million last year, up 11.4%. In Australia, it grew to $757.6 million, up 24%.

Ford says the concept of using home equity is quickly becoming "more advanced". 

He says reverse mortgages can be a "valuable tool" for advisers looking to free up equity for clients: "I've heard of lots of people who want to retire but can't because of existing debt. Under the Responsible Lending Code it's harder for older people to get a regular mortgage. Reverse mortgages can really help."

Heartland cut its reverse mortgage interest rate to 6.95% on October 1. 

 

Tags: Heartland Lending mortgages reverse mortgages

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Comments from our readers

On 5 October 2019 at 11:18 am 747 said:
Have approached 'heartland' and their Location of the property is total DISCRIMINATION....Do not believe anything they say...just a bunch of LIARS...Corruption and rip off agents.... Signed: Christopher Howes
On 7 October 2019 at 2:37 pm Maxwell K said:
I am not at all surprised by such growth in the demand for reverse mortgages.

It was only a matter of time in my view before the public fully understood and appreciated the value,benefits and advantages reverse mortgages could offer retirees.

I predict this trend will only continue to grow on both sides of the Tasman.

Heartland Bank has positioned itself very well indeed to take advantage of this changing trend and reap the benefits.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 ▼6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 ▼6.39
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 - ▼7.14 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 ▼7.74 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 - ▼6.79 - -
Co-operative Bank - Owner Occ 8.40 ▼6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.49 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 6.89 6.55 6.35
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 ▼6.69 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 ▼7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - ▼6.99 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 ▼7.74 7.29 6.59
SBS Bank Special - ▼7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 ▼6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

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