While growth of the reverse mortgage industry in Australia slowed compared to previous years, the marketplace still saw an increase of 13 percent according to a study commissioned by the Senior Australians Equity Release Association of Lenders.
Conducted by Deloitte Actuaries and Consultants, the study shows there were 38,048 loans on issue at the end of the June, with a total outstanding value of $2.61billion, up from $2.48bn at the end of December last year.
Since June 2006, the market has grown from about $1bn, but still only represents about 1-2 per cent of all the senior Australian households in Australia.
Like here in the US, when reverse mortgages were introduced many were concerned that seniors might not understand what they were getting into said Kevin Conlon, Chief Executive of SEQUAL. Findings from the survey suggest that retirees are using them appropriately, and responding wisely to the economic climate through equity release.
"Senior Australians are continuing to show restraint when releasing equity through reverse mortgages, shown by borrowers, on average, only choosing to access about 70 per cent of the actual funding available to them," he said.
He added that one in 10 borrowers chose to repay their reverse mortgage in full each year, rather than letting the debt build until death. You can read a copy of the study results at the link below.