- Heartland Bank has seen 20% growth in reverse mortgages
- The bank is Australia's largest provider of reverse mortgages, aimed at older people wanting to access equity from their homes
- Heartland attributes the growth to ongoing customer demand, and forecasts a further 20% growth this financial year
Heartland Bank said continued strength in reverse mortgage growth underpinned its 16.4% lift in receivables over the last financial year.
Heartland is Australia's major provider of reverse mortgage products, claiming a 40% share of the market and a 55% stake of new business amid increased competition.
Heartland said total reverse mortgage originations hit more than $548 million in the last financial year, up more than $144 million on the previous year.
Its full year results showed a 19.7% lift in reserve mortgage funds owed to the bank, up $391 million in 12 months.
Heartland attributes this to ongoing customer demand, and forecasts further growth of around 20% over the current financial year.
What is a reverse mortgage?
Reverse mortgages are loans that allow older homeowners to borrow against the equity in their homes without the need to make monthly repayments.
Interest is charged and added to the loan balance which can be paid back when the home is sold, or the outstanding amount is retrieved from the estate of the last borrower after they pass away.
Some reverse mortgage holders pay back their loans when cash is freed up from the sale of other assets or becomes available through other sources.
A 2026 study by Deloitte found just 1% of available home equity is currently being accessed by eligible Australian households via reverse mortgage products.
The federal government has also identified reverse mortgages as a way for older Australians to boost retirement incomes and take pressure off its age pension budget.
The government provides a reverse mortgage initiative, the Home Equity Access Scheme, which allows homeowners to access the equity in their homes at a government-set rate, considerably lower than market rates.
See also: Federal government Home Equity Access Scheme
Why are people accessing reverse mortgages?
According to its data, Heartland said the top use for its reverse mortgages is for home improvements, followed by servicing existing debts.
Other uses in the top five are: providing extra income, holidays, or replacing a vehicle.
The biggest users of Heartland's reverse mortgage products lived in Sydney (23%), followed by Melbourne (12%).
The bank said it had provided more than 33,000 customers with a reverse mortgage over the past 22 years with 72 the average age of a new borrower.
Its data shows the average initial loan amount is $162,000 and the average term for repaying the loan is just under six years.
The Deloitte study calculated reverse mortgages could release up to $600 billion in home equity under regulatory guidelines and applying current loan-to-value and lender criteria.