Senior notes earn top marks from three agencies
Specialist retirement lender Household Capital has completed a $304m mortgage securitisation, its third deal of this kind, to fund rising demand for reverse mortgages among Australians aged 60 and over.
The HHC 2026-1 transaction was more than twice covered at a time of record activity in Australia’s residential mortgage-backed securities market. Its senior notes received top ratings: Aaa from Moody’s and AAA from S&P and Morningstar DBRS. Citi arranged the deal, with Citi and Macquarie Bank acting as joint lead managers.
“Our latest innovative mortgage portfolio securitisation is a great outcome for Australian retirees and a big step forward in the evolution of the sector,” said Household Capital chief executive Joshua Funder (pictured).
A $5.5bn market against $3tn in home equity
Household Capital’s loans don’t require borrowers to have an income or make regular repayments. It distributes directly and through partners, advisers, and brokers. It began originating in 2019 and now has a contracted mortgage portfolio of more than $1.2bn.
The new funding covers existing customers’ drawdowns within their approved limits, as well as possible future increases to their credit contracts. Household Capital puts the home equity held by Australians over 60 at more than $3tn. By comparison, a Deloitte survey cited by Household Capital put the reverse mortgage market at around $5.5bn as of 30 June 2025, spread across more than 40,000 households.
In August 2026, the lender completed its acquisition of Macquarie Bank’s reverse mortgage portfolio, moving those customers onto its own platform.
A broader investor base
The deal brought in new money from Australia’s superannuation sector, along with insurers, banks, and institutional credit funds both locally and offshore. Household Capital said the notes appealed to global buyers because they meet international risk retention standards. It plans to list the senior notes on the ASX.
A low-leverage loan pool
The loans backing the deal have a portfolio loan-to-value ratio below 25%, meaning they total less than a quarter of the value of the homes securing them. The senior notes carry an expected average life of 3.3 years.
Funder said the rating reflected features that set the lender’s equity release loans apart, citing “higher voluntary discharge, shorter duration, lower negative equity risk and relatively higher cashflows.”
“Household Capital continues to lead the way in providing access to home wealth for older Australians,” said chair Paul Rogan.
