Reverse Mortgage Loan Blog

A growing, though still small, number of elderly retirees are tapping into the equity in their houses through a reverse mortgage.

Actuarial practice Trowbridge Deloitte has done the first survey of reverse mortgages and found that at the end of last year there were 4500 reverse mortgage loans totalling $227 million in New Zealand.

Trowbridge Deloitte partner James Hickey said the amount of loans from reverse mortgages had more than doubled from $89 million at the end of 2005 to $227 million a year later.

The study found that the biggest age bracket for reverse mortgage loans was 70 to 79, though 60 to 70-year-olds were also a growth area.

The average age of borrowers was 73 and the average loan $49,900.

Almost all of the loans were lump sums and the money was primarily used for home improvements and to pay other debt.

Most of the reverse mortgages carried variable interest rates and only a small amount had fixed interest rates.

The study found that 68 per cent of the loans were sold through mortgage brokers and 71 per cent of the loans were to North Islanders.

Found here.

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