Heartland Reverse Mortgages review

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on April 05, 2022 Fact Checked
Heartland Reverse Mortgages review

Considering a reverse mortgage from Heartland Finance? Savings.com.au spoke to Heartland’s Head of Operations Sharon Yardley to discover what you need to know.

Who is Heartland?

Part of the Heartland Group - a financial services organisation operating across Australia and New Zealand - Heartland Finance traces its roots back to 1875.

While Heartland also offers business loans, its main game is retirement financing.

Heartland’s Head of Operations Sharon Yardley says it is Australia’s leading provider of reverse mortgages.

“Since 2004, Heartland has helped more than 22,000 Australian seniors live a more comfortable retirement by releasing equity from their homes,” Ms Yardley said.

What is a reverse mortgage?

A reverse mortgage may not be a term all Australians are familiar with.

As Ms Yardley explained, a reverse mortgage is like a normal home loan that allows people aged 60 and over to release some of the equity in their property.

“Importantly, you can continue to own and live in your home for as long as you wish while enjoying the benefits of the community, social networks and family memories it provides. Interest is added (compounded) to the loan monthly, with the total loan only payable when you cease to reside in your home,” she said.

Essentially, a reverse mortgage is a way for older homeowners to access the wealth that’s tied up in their home. It is a type of equity release product that generally allows older Australians to borrow money by using the equity in their home as security for the loan.

Helpful guide: What is a reverse mortgage

Benefits of using a reverse mortgage

The main benefit of a reverse mortgage is that it allows you to access the equity in your home without having to sell your house – plus without having to make immediate repayments.

Given the right set of circumstances, a reverse mortgage can fund your retirement to cover living expenses, better your quality of life or pay off debts.

Ms Yardley said taking advantage of a reverse mortgage also means you can continue to own and live in your home for as long as you choose (provided loan obligations are met).

“Funds can be used for almost anything to make your retirement more comfortable such as home improvements, consolidating debt, income supplement, car purchase, travel and more,” she said.

“No repayments are required as the interest is added monthly to the loan and debt is repaid from the future sale of the property, however you can make repayments if you choose to without penalty.

Heartland Reverse Mortgages also offer various drawdown options, including lump sum, regular advances, and a cash reserve facility.

How Heartland can help Aussies save money

Ms Yardley said many retirees find themselves in a position where a lot of their wealth is tied up in the family home which they have owned for many years.

“They are ‘asset rich but cash poor’ because once people stop working, they are no longer receiving the same cash flow to help them to continue to live comfortably into retirement,” she said.

“The pension alone often does not provide enough to live even a modest retirement, and with our ageing population, any funds acquired in superannuation needs to stretch further.

“This causes retirees to have limited cash flow, and they may believe the only way to free up cash is by selling the family home.

Ms Yardley said selling the family home can work for some, but for many it is not the preferred option, with Heartland-supported RMIT research reporting that almost 90% of older Australians wish to age in place. 

“Heartland provides an option for retirees who wish to remain in their home, to release some of it’s equity all while continuing to own and live there for as long as they choose,” she said.

“Releasing equity increases their cash flow to enable them to live a more comfortable retirement, and reduce financial stress.”

Borrowers can use this money for daily expenses, bills and debtshome improvements and car expenses.

You can use your owner occupied home, or a residential investment property or holiday home, as security.

IMPORTANT NOTICE: Applications are subject to loan approval criteria. Terms, conditions, fees and charges apply. Credit provided by ASF Custodians Pty Ltd (ACN 106 822 780 / Australian Credit Licence No. 386781).


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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 26, 2022. View disclaimer.


Image by Anukrati Omar via Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Aaron joined Savings.com.au in 2021. He is a finance journalist with a keen interest in property, the share market, and improving financial literacy in young Australians.

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