Increased awareness in New Zealand has driven the product's popularity
Heartland has announced that it expanded its reverse mortgage business following the product’s popularity in the country.
Second Property Loan, the new product, aims to help people who don’t want to release equity from their primary residence. It could be used for home improvements, travel, bills, and debt consolidation.
Heartland confirmed that it would provide the product to over 60s on second homes, holiday homes, and investment properties. It would also offer the same guarantees as to its main reverse mortgage lending products.
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Heartland’s half-year results for the six months to December 2019 revealed a 10% increase in its New Zealand reverse mortgage book as Kiwis became more interested in equity release products. Its reverse mortgage receivables grew $26 million, while its reverse mortgage net operating income jumped to $13 million – up $2.7 million.
Andrew Ford, head of retail at Heartland, said the growth was driven by increased awareness in the country – with customers aged 60 to 90 leaning towards using cash to renovate homes, providing extra income for expenses, and making their retirement more comfortable.
“They are having to eat into savings or tighten their belt. Reverse mortgages are a way to maintain the lifestyle they desire and deserve. It can be transformational,” Ford said, as reported by Landlords.co.nz.
