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Heartland reverse mortgages grow 20%, online-only home loans sink

Heartland Group's reverse mortgages continued to grow at 20% through its 2024 financial year, the same rate as in 2023, but its online-only home loans fell by 0.6%.

Thursday, August 29th 2024, 12:25PM

The bank's New Zealand reverse mortgage book rose by $180 million, or 20.2%, to $1.07 billion while its Australian book grew by 19.7%, or A$276 million, to A$1.67 billion.

Unfortunately, Heartland provided far less information than it has previously and it changed from reporting the Australian reverse mortgage book in NZ dollars to Australian dollars.

It did provide NZ dollar figures in its chart showing what happened to receivables across all its activities and that showed the increase in the Australian reverse mortgage book was NZ$298 million the first-half report showed a NZ$153 million increase, implying the second half increase was NZ$145 million.

The financial statements break out the different activities for NZ, although the online-only home loans are presumably captured in “other,” and there's no breakdown for Australia.

The only mention in Heartland's media release of thee online-only home loan offering, which the first half results showed growing 5.6%, was that its “portfolio is similarly robust with a low arrears rate of 0.4%.”

Heartland didn't say what the online-only book was at June 30.

That was in the context of the NZ reverse mortgage book having a weighted average loan-to-valuation ratio (LVR) of 23.5%. That's up from 22.8% at Dec 31 and from 21,3% at June 30 last year.

NZ reverse mortgages with LVRs above 75% went from zero at both June 30 and Dec 31 last year to two at June 30 this year, accounting for 0.1% of the book.

The average age of NZ reverse mortgage borrowers fell to 77 years from 78 previously and the average loan size is now $141,183 compared with $128,938 a year earlier.

LVR at origination has dropped to 9.1% at June 30 from 9.8% a year earlier.

In the Australian reverse mortgage book, the average loan has risen to A$188,756 from NZ$180,432 a year earlier while the weighted average LVR has risen to 23.5% from 21.5%.

Those with LVRs above 75% rose to two from one a year earlier.

Heartland's net profit for the year ended June 30 fell 22.2% to $74.5 million with the underlying result coming in at $102.7 million, down 6.7% and below guidance of between $108 million and $112 million.

Chief executive Jeff Greenslade said that reflected an extra $10.1 million of provisions taken late in the year following “a sudden and deep deterioration emerging in May and June.”

Charges against profit for bad debt doubled to $46.4 million from $23.2 million the previous year.

Greenslade said the peformance of the reverse mortgage books showed their “ability to perform in good times and bad.”

Tags: Heartland

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.94 - - -
AIA - Go Home Loans 8.49 6.35 5.79 5.79
ANZ 8.39 ▼6.79 ▼6.29 ▼6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼6.19 ▼5.69 ▼5.69
ASB Bank 8.39 6.35 5.79 5.79
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.90 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - ▼6.19 5.79 5.79
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 8.44 - - -
BNZ - Rapid Repay 8.44 - - -
BNZ - Std 8.44 6.45 5.89 5.79
BNZ - TotalMoney 8.44 - - -
CFML 321 Loans 6.70 - - -
CFML Home Loans 6.95 - - -
CFML Prime Loans 8.75 - - -
CFML Standard Loans 9.70 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.15 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 8.15 6.35 5.79 5.69
Co-operative Bank - Standard 8.15 6.85 6.29 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - ▼6.60 ▼6.10 -
First Credit Union Standard 8.50 ▼7.20 ▼6.70 -
Heartland Bank - Online 7.99 6.69 6.35 6.15
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.85 6.45 5.99 5.89
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 8.25 7.19 6.69 6.59
Kiwibank - Offset 8.25 - - -
Kiwibank Special - 6.29 5.79 5.79
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.75 ▼6.69 ▼6.19 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.49 ▼7.05 ▼6.39 ▼6.39
SBS Bank Special - ▼6.45 ▼5.79 ▼5.79
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.94 ▼5.45 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
TSB Bank 9.19 ▼7.09 ▼6.59 ▼6.59
TSB Special 8.39 ▼6.29 ▼5.79 ▼5.79
Unity 8.64 ▼6.29 ▼5.79 -
Unity First Home Buyer special - 6.20 - -
Wairarapa Building Society 8.50 6.65 5.99 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 8.44 6.53 6.10 5.79

Last updated: 3 October 2024 9:23am

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