Reverse Mortgage Loan Blog

The announcement by the Federal Government to give a 50% cut to the minimum account-based pension drawdown will lead to an increase in reverse mortgage activity, according to the National Information Centre on Retirement Investments (NICRI).

The Centre, which has just launched an independent and free reverse mortgage information service funded by the Commonwealth, said interest in reverse mortgages was already at high levels.

“Low interest rates have made reverse mortgage products more attractive over the last few months.” NICRI Director, Wendy Schilg explained.

“Poor share performance and low interest rates have eaten into retiree’s income, and reverse mortgages have been seen by some as a way to maintain their standard of living.”

Schilg said that due to the rule changes the centre expected more retirees to look into these products.

According to the Deloitte SEQUAL Reverse Mortgage Study released in October last year, the market is worth $2.3bn. Brokers account for 48% of all new reverse mortgage sales.

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