tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Monday, May 16th, 7:04PM

Mortgages

rss
Latest Headlines

Reverse mortgages set new record

New Zealand's leading Home Equity Release (HER) provider has just passed a milestone.

Friday, April 8th 2022, 12:47PM

by Eric Frykberg

Heartland Bank says it has helped 20,000 customers gain reverse mortgages.

It says enquiries into reverse mortgages are also increasing, along with the numbers of mortgages actually granted.

Heartland attributes this trend to the continued rise in cost of living, along with increased awareness and acceptance of reverse mortgages in principle.

In celebrating its progress, Heartland cited the case of a Taupo couple in their mid 70s.

After consulting an adviser, they took out a reverse mortgage to pay off a small standard mortgage, upgrade the car and build a garage.

Heartland said they were happy with the process.

HER lending has been growing steadily, by 16% in two years, according to figures from the Reserve Bank (RBNZ).

But it is still small in quantum: 0.14% of total lending.

However, most advisers expect the market to increase further, because some people have no choice.

Information released by the Financial Services Council says many people run out of savings or investments 10 years after retirement, and have to fall back on NZ Super.

But research by Massey University shows NZ Super is not enough to pay for even the most modest lifestyle.

Some advisers describe people coming to them for reverse mortgages who are fed up with being broke.

But their venture into HER is restrained: at Heartland they are taking out loans at just 10% average on the value of their home.

And they are doing so quite late in life, 78 years old on average.

In many cases, people secure the right to take out money under a reverse mortgage, but do not actually withdraw the cash.

Instead, they keep the entitlement to the money in readiness for a rainy day, in a manner that parallels an overdraft facility.

Meanwhile, the standard reverse mortgage system is about to be challenged by the company, Lifetime Retirement Income.

This firm will reveal a new scheme under which people sell a tiny portion of their home, year by year, for 10 years.

While the home owners lose equity – up to 35% - they incur no interest payments, which compound under standard reverse mortgage schemes.

Lifetime says this certainty can bring greater peace of mind.

Tags: mortgages

« More credit woes says CentrixDivided opinion ahead of this week's monetary policy statement by RBNZ »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Brian Gaynor dies
    “RIP - a true icon and such a humble person who helped so many....”
    13 hours ago by p simone
  • Brian Gaynor dies
    “Very sad. Condolences to him family....”
    15 hours ago by sanet.drury@gmail.com
  • Brian Gaynor dies
    “Brian was someone you would always go and listen to if he was presenting at a seminar or conference, someone you would always...”
    15 hours ago by MikeBeuvink
  • Brian Gaynor dies
    “A true champion of the industry. My sincere condolences to family, colleagues and friends. ...”
    15 hours ago by Pragmatic
  • [GRTV] AIA rolls out direct life insurance plans
    “Thanks Lifeadviser1, and it is great to see you have been having a play in the system. You are right, in the original...”
    17 hours ago by Sam.Tremethick
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 ▲4.29 ▲5.09 ▲5.35
Kainga Ora ▲5.43 ▲4.57 ▲5.58 ▲5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 ▼5.14 6.05 6.15
TSB Special 4.79 ▼4.34 5.25 5.35
Unity 5.65 ▲4.80 ▲5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

Last updated: 16 May 2022 9:03am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com