Reverse mortgage market under pressure
Reverse mortgage settlements of $141 million in the six months to December were down more than 20 per cent on the June half, a reflection of a more cautious approach by borrowers and constraints on lenders.
The latest Sequal and Deloitte reverse mortgage survey shows that settlements have fallen steadily from their peak in 2006.
Sequal chief executive Kevin Conlon said borrowers were limiting their use of reverse mortgage to needs, such as home repairs, rather than borrowing to fund lifestyle improvements, such as travel.
At the same time a number of lenders had struck problems with funding.
Sequal membership fell from 14 to 11 last year and of the 11 only eight are active.
Deloitte Actuaries and Consultants partner James Hickey said inquiry levels were up this year. "More self funded retirees are going to brokers because they need some diversification in their retirement incomes."
The total reverse mortgage loan book stood at $2.5 billion at the end of last year, with 37,500 loans outstanding.
Source: The Sheet