Research finds reverse mortgages support ageing in place

1


NZX/ASX Release

Research finds reverse mortgages support ageing in place

14 December 2020

Heartland Group Holdings Limited’s (NZX/ASX: HGH) (Heartland Group’s) subsidiary Heartland
Australia Group Pty Ltd (Heartland Australia), through its Australian reverse mortgage business
(Heartland Seniors Finance), has engaged with RMIT University (RMIT) to develop research on
financing ageing in place – that is, seniors ageing in their current home compared with moving into
specialised care, or even moving at all.

RMIT’s research reports that almost 90% of senior Australians want to remain in their home for as
long as they can – but limited superannuation and the rising cost of living is restricting the ability to
fund ageing in place and provide for home renovations and a comfortable retirement. Experts
believe reverse mortgages could be the solution.

Heartland Seniors Finance is Australia’s leading reverse mortgage provider with 12-month market
share increasing from 21% in March 2019
1
to 26% in March 2020
2
– a similar trend is expected in the
future. Since 2004, Heartland has helped more than 21,000 Australians aged 60 and over to release
more than $1.2 billion of equity from their homes, so it does not come as a surprise to Heartland
that the majority of Australians prefer to remain in their home as they age.

In the financial year ended 30 June 2019, more than 50% of Heartland Seniors Finance customers
used their reverse mortgage to repay existing debt. This is up from 31% of loan purposes during the
period 2014-2018. As more Australian seniors enter retirement with debt, RMIT suggests expanding
the ‘traditional’ three pillars of retirement funding – pensions, super and private savings – to include
equity release options such as reverse mortgages. By releasing home equity, a reverse mortgage
could help Australian seniors fund the cost of retirement and facilitate ageing in place.

In the financial year ended 30 June 2020, Heartland’s Australian reverse mortgage receivables
increased by $149.1 million (up 18.4%)
3
to $957.5 million. To support continued growth, Heartland
secured A$142 million of long-term funding in September 2020. Heartland now has access to
committed Australian reverse mortgage loan funding of A$1 billion in aggregate.

Sponsoring RMIT’s research allows Heartland to further understand the current economic
environment for retirees, the needs of senior Australians, and how innovative financial products
such as reverse mortgages can assist seniors to live a more comfortable retirement.

See the full report for more detail: Reverse mortgages: Financing ageing in place.



1
Based on APRA ADI Property Exposure combined with Heartland Seniors Finance data as at 31 March 2019.
2
Based on APRA ADI Property Exposure combined with Heartland Seniors Finance data as at 31 March 2020.
3
Excluding the impact of changes in foreign currency exchange rates.

2

Report key findings
• 93% of older Australian homeowners would prefer to remain in home ownership.
• 87% of those aged 65-74 want to stay where they are, or within 10km of their current home.
• Almost 90% of older Australians say they wish to age in place - that is, to remain in their
current home compared with moving into specialised care, or moving at all.
• 36% of older Australians live in a home that may be unsuitable for ageing in place, without
upgrades or renovations.
• Approximately 29% of seniors say they will not be able to afford the changes required to
make their home age-friendly.
• 25% of respondents believed they could afford the costs of aged care, and 40% simply did
not know whether they could afford aged care costs in the future.
• 13% of Australians already plan to sell the family home to fund their retirement, with a
further 42% undecided on what they will do.
• To release equity, downsizing does not appear to be a preferred solution for older
households due to the costs (both financial and physical) involved and the negative impact it
can have on housing and neighbourhood satisfaction.

- Ends -

For further information, please contact the person(s) who authorised this announcement:

Jeff Greenslade Sharon Yardley
Chief Executive Officer Head of Operations
Heartland Group Heartland Seniors Finance
M: +64 27 382 0023 M: +61 422 474 009
E: jeff.greenslade@heartland.co.nz E: syardley@seniorsfinance.com.au

Nicola Foley
Head of Communications
Heartland Group
M: +64 27 345 6809
E: nicola.foley@heartland.co.nz


Address: Address:
Level 3, Heartland House Level 7
35 Teed Street 63 Exhibition Street
Newmarket, Auckland Melbourne, Victoria
New Zealand Australia

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93
of older Australian homeowners’
ideal is to remain in home ownership.
90
36
29
40
vs.
vs.
¼
of older Australians say they
wish to age in place - that is,
to remain in their current
home compared with moving
into specialised care, or
moving at all.
43
Home improvements
31
50
Payment of existing debt
in more recent years.
increasing to
of seniors live in a home that
may be unsuitable for ageing
in place, without upgrades or
renovations.
of seniors say they will not
be able to afford the changes
required to make their home
age friendly approximately.
of those aged 65-74 want to
stay where they are, or
within 10km of their current
home.
respondents believed
they could afford the
costs of aged care
respondents simply did not know
whether they could afford aged care
costs in the future.
87
Financing ageing in place: key findings
The most popular purpose for a reverse
mortgage usi ng Heartland data:
The most common changes
needed in people’s homes were:
65
handrails
%
51
ramps
%
57
Wet area modifications
(toilet/bath/laundry)
%
%
%%
%%
%%
%
%
+
www.cur.org.au/cms/wp-content/uploads/2020/11/financing-ageing-in-place.pdf