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New data released by reverse mortgage brokerage Seniors First has revealed that demand for reverse mortgage loans through the Commonwealth’s Home Equity Access Scheme (HEAS) increased by 21 per cent over the past 12 months.
At the same time, Seniors First found online searches relating to reverse mortgages had increased by 62 per cent over the past six months.
Seniors First chief executive officer Darren Moffatt said the growing use of reverse mortgages came as the product becomes an increasingly important consideration for older Australians planning retirement or restructuring finances amid ongoing cost-of-living pressures.
“For many older Australians, their home is their biggest asset, and a reverse mortgage can be a practical way to access some of its value without needing to sell or downsize,” Moffatt said.
Typical use cases for reverse mortgages include freeing up cashflow from equity to pay for outstanding debt, aged care services, everyday cashflow, and renovations.
Reverse mortgage complexity grows
However, while the popularity of reverse mortgages is growing, so too is the complexity.
A study conducted by Seniors First last year found more than 150 key differences between Australia’s top four reverse mortgage lenders.
Differences included loan product features, “hidden” lender policies, and post-settlement loan procedures, as well as ongoing flexibility and future access to funds.
According to Seniors First, common mistakes made by borrowers include failing to fully understand lender options, focusing only on short-term financial needs without considering longevity and estate planning, making decisions under financial or emotional stress, failing to work with a specialist reverse mortgage broker, and missing opportunities to minimise interest costs through loan structuring.
“What we’ve learned over two decades is that the best outcomes happen when people take their time, understand their options, and get specialist advice early,” Moffatt said.
As a brokerage specialising in the product, Seniors First has also launched an online education hub aimed at helping Australians aged 55 and over better understand reverse mortgages and home equity release options.
Speaking at an event in Sydney on Tuesday (19 May) celebrating Seniors First's 20th anniversary, the brokerage stated that it is Australia’s largest and oldest reverse mortgage specialist having now facilitated more than 6,500 reverse mortgage loans nationwide.
Moffatt estimated that the company now wrote 1 in 5 reverse mortgages in the country.
Moffatt commented: "Educating borrowers is powerful, and that's really been the driver for our growth. So we have, this week, launched a new tech initiative, which is all about borrower education: SERAH. This stands for Seniors Equity Release Access Hub; a secure online portal for Australians over 55 powered by Seniors First.
"It has an AI equity release assistant interface called Ask SERAH, a reverse mortgage calculator, a content library with 6.5 hours of educational video content explaining reverse mortgages in plain English, an application progress tracker, plus human chat support and a book a meeting option, so borrowers can book in directly with their broker using the Schedule a Meeting tab.
"SERAH brings learning, guidance and support together in one place, so you can release home equity with confidence, and it's backed by Seniors First, the oldest continuing brand in Australian reverse mortgages," the broker director said.
"This is really to accelerate the education in the market," he said.
[Related: Clinch launches new equity release loan]
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