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Heartland increase HER LVR

Heartland Bank has increased the LVR limits on its reverse mortgages for the first time in 17 years.

Saturday, November 20th 2021, 11:12AM

by Eric Frykberg

Reverse mortgages have been made easier to get by Heartland Bank, with the bank raising the LVRs on such loans by 5%.

Heartland Bank is the largest player in the Home Equity Release market.

The company's general manager for retail and reverse mortgages Andrew Ford says this is the first time LVR limits have been increased since 2004.

He says the change will enable some people to get reverse mortgages who were previously unable to get one, and should help people to have a better life in their retirement.

“If the car breaks down or people want to go on a holiday or they need a hip replacement, then (the money) is there for them to use.”  

He says LVRs are all based on age and the limits will go up proportionately. 

“For instance, with a 70 year old, we used to lend them a maximum of  25% of a home, and now we will lend up to 30%

“An 80 year old can borrow, 40%  and the maximum is 50% to a 90 year old.”

These moves come as reverse mortgages become more popular generally. 

Official figures from the Reserve Bank show the total value of reverse mortgages has grown in the past two years from $620 million to $718 million.  

And while it is just 0.14% of total bank lending, that growth rate is 16% in just two years.

At Heartland Bank, the rise has been even more marked.  

“In the four months ended October 31, we have had a 70% increase in new business compared with the same time last year,” Ford said. 

“So we have seen a big increase in the number of older people wanting to access some equity in their home so they can live a more comfortable retirement.”  

There has been some speculation that the recent big rises in house prices have given people more headroom to take out a reverse mortgage without severely depleting the equity left over to bequeath to their kids.

Ford says this has played a big part in the trend. However another player, SBS Bank, says it is only one factor in the growth of reverse mortgages. Also important is the fact that people are simply becoming more aware of them.

Tags: Heartland HER

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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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