Heartland Bank rebrands reverse mortgage business

This follows the acquisition of Challenger Bank on 30 April this year. Post-acquisition, Heartland’s Australian businesses, including Heartland Finance and StockCo, were integrated into Challenger Bank, which began trading under the Heartland Bank name from 1 May 2024.

Heartland Bank is a provider of reverse mortgages, holding a 42 per cent share of the market. As a digital specialist bank, it offers competitive savings products and is unique in providing both reverse mortgages and specialist livestock finance.

Medina Cicak, the newly appointed chief commercial officer, said: “We are excited to deliver the Heartland Bank brand to our reverse mortgage customers.

“The simplified and modern new brand elements are visually appealing and provide simple navigation across our customer-facing platforms. The rebrand supports Heartland Bank’s strategy to provide finance solutions that meet the unique needs of older Australians.”

With the rising cost of living, reverse mortgages are becoming an increasingly viable option for many older Australians, according to the bank. This financial product allows home owners to release equity while continuing to own and live in their homes, with no repayments required until the property is sold.

Heartland Bank has experienced approximately 20 per cent growth in its reverse mortgage portfolio over the past financial year, ending 30 June 2024.

Despite this growth, customers are borrowing conservatively, with the average loan term at repayment being six years and the average initial loan amount at $142,000. Although the average initial loan amount has increased from $127,000 in the previous financial year, customers continue to borrow only what they need.

Cicak said: “We are seeing a continued trend in how our customers are using their reverse mortgage. Debt consolidation and supplementing income remain within the top three uses for a reverse mortgage as older homeowners seek to ease cost-of-living pressures.”

Heartland Bank’s data revealed that 55 per cent of its customers use their reverse mortgage to upgrade their home, 51 per cent to consolidate debt, and 31 per cent for additional income. Other uses include upgrading a car, taking a holiday, and covering medical costs.

“While economic pressures are impacting loan values, the low average weighted loan-to-value ratios (LVRs) of 23.5 per cent (up from 21.5 per cent at 30 June 2023) and conservative origination standards have ensured customers can weather the recent combination of volatile house prices and high interest rates,” Cicak said.

“Our customer data confirms that many customers are using their reverse mortgage to make the most of a lifestyle that is free from financial stress, while remaining in the community and place they call home for as long as they choose.”

Since 2004, Heartland has assisted more than 27,900 Australians in achieving a more comfortable retirement by releasing over $1.8 billion of equity from their homes.

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Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.