Heartland Bank Australia has cut reverse mortgage rates for new customers for the second time this year, a move that could expand borrowing capacity for older homeowners and open new advice conversations for brokers.
The latest reduction, effective 7 April, takes the advertised rate to 8.79% p.a., with a comparison rate of 8.82% p.a.
Heartland, which says it accounts for more than 40% of the Australian reverse mortgage market, is increasingly framing the product as a retirement income solution rather than a last‑resort option.
“This second reduction is a deliberate step to ensure our products remain the most effective tool for retirees looking to unlock the value in their homes,” Chief commercial officer Medina Cicak said in a statement.
That focus comes against the backdrop of a sizeable equity pool that remains largely untouched. A Deloitte study commissioned by Heartland estimates Australians over 60 hold about $3 trillion in housing but have accessed less than 1% of an estimated $600 billion of releasable equity. The reverse mortgage market itself remains small, at around $5.5 billion in outstanding balances.
Deloitte partner James Hickey observed that “current low uptake indicates many don’t know about the product or understand how it may help them meet their financial goals”.
For brokers, that awareness gap represents both risk and opportunity. The risk is that clients may turn to higher‑cost credit for renovations, healthcare, or debt consolidation. The opportunity is to position regulated equity‑release solutions as part of holistic retirement planning, alongside super, pension income and other investments.
Heartland says the latest reduction is designed to make it more affordable for over‑55s to fund upgrades, medical expenses, and lifestyle needs while remaining in their homes. Cicak added: “Our goal is to ensure that home equity is a dynamic part of a retirement plan, not a static asset.”
For broker clients, cheaper reverse mortgage rates can also help retirees support first‑home buyers in the family, restructure existing mortgage rates, or investment loans, and smooth cashflow without forcing the sale of key property assets.
Data from the Deloitte work also points to conservative average drawdowns and strong voluntary repayment behaviour among borrowers, giving brokers a firmer basis to discuss suitability, risks and alternatives with older clients.
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