Heartland records 20% growth in reverse mortgages

Strong half-year results driven by ageing population, cost of living

Heartland records 20% growth in reverse mortgages

Heartland Group’s Australian reverse mortgage business continues to provide strong results for the financial services company, notching up 20% growth in the first half of 2024, driven by the rising cost of living and an ageing population.

The financial results for the six months ending December 31, 2023, showed net operating income (NOI) of $26.2 million for the group’s Australian reverse mortgages, an increase of 13.4% ($3.1m) compared to 1H2023.

Heartland Group is a New Zealand-based business, which includes Heartland Bank in New Zealand, offering savings and deposit products, home, business, car and rural loans, and reverse mortgages.

In Australia, the group offers reverse mortgages through Heartland Finance, which has increased its market share to 41% as of Sept. 30, 2023, compared to 36% in the previous year.

Heartland also owns StockCo Australia, a specialist livestock financier, acquired by Heartland in May 2022.

What’s driving Heartland’s growth in reverse mortgages

Commenting on Heartland Group’s 1H2024 results, Sharon Yardley, Heartland Australia’s general manager for reverse mortgages, said she was pleased the business had maintained its position as the leading provider of reverse mortgages in Australia and achieved strong growth “supporting people as they age so that they can use the funds as they need it”.

Yardley (pictured above) said there were three factors driving the growth in reverse mortgages.

“There’s a real demand being driven by home improvements to support ageing in place and living well, combined with debt consolidation to free up cash that's going towards those loan repayments, credit card repayments, mortgage payments, and also income to support cost of living and everyday expenses,” said Yardley.

Home improvements

Yardley said the top reason why customers took out reverse mortgages continued to be supporting home improvements. “That's really to support people ageing in place, living well in retirement.”

Debt consolidation

Debt remained in the number two driver for reverse mortgages, with people entering retirement in debt and the elevated interest rates of debt.

“Due to the economy and interest rates, we're finding a lot of people are requesting a reverse mortgage to help consolidate that debt to free up cash so that repayments become optional every month, rather than having to be paid, to give them that additional flexibility,” Yardley said.

Ongoing income

“The third purpose is really entrenched now and that is ongoing income,” said Yardley. “Ongoing income to help support cost of living and everyday expenses.

“It didn’t used to be top three but has been now for the past couple of years. We expect to see that continue – a combination of factors but the cost of living increasing due to inflation, but also people retiring with more debt and wanting to get more out of their retirement.”


Travel was another factor motivating reverse mortgages that had recently picked up, after being flat for a few years.

“We’re seeing a bit more interest in travel and in some ways life going back to normal a couple years post-COVID, which is really exciting to see,” Yardley said.

Market share growth

Heartland’s market share for reverse mortgages has now reached 41%, making it the leading provider in Australia.

Yardley said it was only one of a few companies advertising and talking about reverse mortgages in the sector.

“We’re one of only two providers that advertise on TV, and among a handful that are really active in the market and advertising digitally as well.

“I think our market share is a combination of the fact that we are promoting the product and also we have an ageing population and a population that's looking for funds in retirement.”

Recent research conducted by RMIT University in partnership with Heartland showed that ageing in place would place a strain government resources, with 90% of Australians wanting to remain in their homes as they aged.

However, only 29% of people say they will be able to afford the changes needed in their home to be able to age in place and make their home age friendly.

“It just shows that reverse mortgages will be a good solution … there’s more and more people getting older and entering retirement – over 20,000 people every month in Australia turn 60. They need options, they need help,” said Yardley.

Broker partnerships

Heartland had been committed to the broker channel since the company was set up  in 2004, Yardley said.

“We have really invested in the partner channel. Roughly 50% of our lending is through the broker channel.”

In addition to providing brokers with training and accreditation when they sign up with Heartland, brokers also received ongoing support.

“We have a broker portal that has a lot of materials and resources, including marketing material helping brokers with their clients go through reverse mortgages and how it works,” said Yardley.

Brokers were also given regular monthly market updates and they could submit online applications directly to Heartland through a portal.

“The broker market is really important to us and we provide ongoing support as well as that upfront accreditation.”

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