While two banks have announced they are pulling out of offering reverse mortgages, there are other providers specialising in the product.
Both Commonwealth Bank of Australia (CBA) and its subsidiary Bankwest, have said they will no longer offer reverse mortgage products from 1 January. CBA is the last of the four majors to remove the product.
But specialist providers like Heartland Seniors Finance say they are seeing strong growth in demand for reverse mortgages.
CEO of Heartland, Andrew Ford, said they have seen a real need for people in retirement to have options.
A recent review of reverse mortgages by the Australian Securities and Investments Commission (ASIC), said reverse mortgages played a great role but that borrowers needed more information.
Ford said the ability for Heartland to specialise in reverse mortgages meant they could provide the right advice and help brokers get the best result for customers.
He added, “We provide brokers with considerable education and accreditation to ensure they can help ensure their customers make an informed decision.
“The beauty of reverse mortgages means they are heavily regulated and has a number of controls in place to make sure the consumer makes an informed decision.
“I think reverse mortgages suits a specialist provider and in Heartland because all our staff live and breathe reverse mortgages we’re the most knowledgeable in the market we can assist our customers and our broker network to maximise the opportunity and ensure that we do it in a way in a responsible manner.
“It does suit a specialist provider that’s reflected in the fact that those that are not specialist in this market have decided by and large to no longer participate in it.”
There are still non-major banks and non-banks continuing to offer the product. IMB Bank offers the product both via brokers and branch network, with a particular focus on using the product to help with Aged Care costs.
About its departure from reverse mortgage products, a CBA spokesperson said, “At the Commonwealth Bank, we constantly review and monitor our suite of home loan products and services to ensure we are maintaining our prudent lending standards and meeting our customers’ financial needs.
“As part of our strategy to become a simpler, better bank, we are streamlining our product portfolio and have made the decision to withdraw our Equity Unlock for Seniors (EQFS) product from sale.
“From 1st January 2019, this product will no longer be available for sale or limit increases. We will continue to support our existing customers who have this loan with us.”
Bankwest said it would also continue to support existing customers, but from 1 January its Seniors Equity Release product will no longer be available to new customers.
A spokesperson said, “Bankwest has made the decision to withdraw the Seniors Equity Release product from sale, as this will simplify our product portfolio and allow us to focus on our target segments.
“For those customers who already have a Seniors Equity Release product, it is important to note that their product will remain open and they can continue to use it as they have been to date.
“Existing customers will be able to continue to complete all maintenance activities except for limit increases on existing loans.
“We are currently communicating with every existing customer who has a Seniors Equity Release product to let them know of the changes and how it may impact them.”