Heartland Bank, the leading reverse mortgage lender in Australia and New Zealand, will rebrand its dedicated reverse mortgage division from “Heartland Finance” to “Heartland Bank” following a recent acquisition and a repositioning of its offerings.
“We are excited to deliver the Heartland Bank brand to our reverse mortgage customers,” said Medina Cicak, the bank’s newly appointed chief commercial officer. “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.”
Reverse mortgages are an increasingly in-demand financing option for older Australians and New Zealanders. Over the course of the past fiscal year, Heartland has seen its reverse mortgage portfolio grow by roughly 20%, with borrowers increasingly open to loans with terms described by the bank as more conservative.
“The average loan term at repayment is 6 years, and the average initial reverse mortgage loan amount is $142,000,” the bank explained, a figure that comes out to roughly $97,000 in U.S. dollars. “While the average initial loan amount has increased from $127,000 in the prior financial year, customers continue to only borrow what they need.”
Cicak added that the bank’s reverse mortgage customers are primarily driven by inflationary pressures, as inflation has typically hit other countries harder than it has in the United States. In 2023, Australia’s annual rate of inflation stood at 4.1%, according to data from Trading Economics, while the U.S. experienced an inflation rate of 3.1% that year, according to the White House Council of Economic Advisors.
“We are seeing a continued trend in how our customers are using their reverse mortgage,” Cicak said. “Debt consolidation and supplementing income remaining within the top three uses for a reverse mortgage as older homeowners seek to ease cost-of-living pressures.”
More than half of the company’s reverse mortgage customers (55%) are using their loan proceeds to fund home renovations or to consolidate debt (51%). Nearly one-third of borrowers (31%) describe “additional income” as the reason for obtaining their loans.
Since 2004, the company has served roughly 27,900 Australians, amounting to a total equity release of $1.8 billion AUD, or roughly $1.2 billion USD. Heartland reported that the onset of the high-inflation environment in 2022 led to a notable uptick in reverse mortgage business.
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