Debt consolidation helps drive Heartland reverse mortgage business

The average reverse mortgage balance was $128,938 at June 30, up from $116,728 a year earlier, and the average loan-to-valuation ratio (LVR) rose to 21.3% compared with 18.3% a year ago.

But the average LVR when a reverse mortgage is taken out has dropped slightly to 9.8% from 10%.

“We've seen an increase in using reverse mortgages to help consolidate and manage debt,” says head of retail Keira Billot.

Customers are using Heartland's facility to repay credit cards and personal loans, which typically have higher interest rates, and to avoid having to make regular repayments on such loans, Billot says.