With new research showing that reverse mortgages have increased in popularity among older Australians, it comes as no surprise that mortgage brokers remain the preferred channel for distribution of the mortgage product.

The Deloitte SEQUAL Reverse Mortgage Study found that while the local reverse mortgage market grew by 13 per cent over the last financial year, loans through the broker channel increased slightly over the last six months to the 30 June 2009.

The report found that 4,950 new borrowers entered the market with the average age of reverse mortgage borrowers sitting at 74.

The main reason for taking out a reverse mortgage was to receive a regular income stream in retirement, followed by debt repayment and home improvement.

Senior Australians Equity Release Association chief executive, Kevin Conlon, said the report showed borrowers were using their reverse mortgages appropriately – with many choosing to repay their debt in full each year rather than let the debt build up until death.

“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”, Mr Conlon said.

Mortgage brokers remained the preferred choice with 47 per cent of new loans taken through brokers and planners in the first half of 2009.

There are currently 1,500 mortgage brokers accredited in Australia to offer reverse mortgage products.
Source: Broker News, Mortgage Business