We’re pleased to confirm that Heartland Bank’s Reverse Mortgage business, Heartland Finance, has rebranded to Heartland Bank.

Heartland Bank (previously known as Challenger Bank) is a digital specialist bank in Australia offering competitive savings products and is the only bank to offer both reverse mortgages and specialist livestock finance.

Being part of Heartland Bank allows us to support more Australians to live a more comfortable retirement. Heartland Bank is Australia’s leading provider of reverse mortgages, with 42% share of the reverse mortgage market.

Newly appointed Chief Commercial Officer, Medina Cicak said, “We are excited to deliver the Heartland Bank brand to our Reverse Mortgage customers. The simplified and modern new brand elements are visually appealing and provide simple navigation across our customer facing platforms. The rebrand supports Heartland Bank’s strategy to provide finance solutions that meet the unique needs of older Australians.”

With the increasing cost of living, a reverse mortgage can be a good option for many older Australians as they look to ease financial pressures in retirement, providing homeowners the ability to release equity while continuing to own and live in their home. No repayments are required, as the debt can be fully repaid from proceeds received from the property in a future sale.

A conservative approach to the growing demand for finance in retirement in Australia

Heartland Bank has seen approximately 20% growth in its reverse mortgage portfolio over the past financial year, ending 30 June 2024. However, there are signs customers are continuing to borrow conservatively. The average loan term at repayment is 6 years, and the average initial Reverse Mortgage loan amount is $142,000. While the average initial loan amount has increased from $127,000 in the prior financial year, customers continue to only borrow what they need.

“We are seeing a continued trend in how our customers are using their Reverse Mortgage. Debt consolidation and supplementing income remaining within the top three uses for a Reverse Mortgage as older homeowners seek to ease cost-of-living pressures.”

Customers often select more than one purpose for their loan. 55% of Heartland Bank’s customers are using their Reverse Mortgage to upgrade their home, 51% are choosing to consolidate debt, and 31% for additional income. Other purposes including upgrading a car, taking a well-deserved holiday, and medical costs.

“While economic pressures are impacting loan values, the low average weighted loan-to-value ratios (LVRs) of 23.5% (up from 21.5% at 30 June 2023) and conservative origination standards have ensured customers can weather the recent combination of volatile house prices and high interest rates.”

“Our customer data confirms that many customers are using their Reverse Mortgage to make the most of a lifestyle that is free from financial stress, while remaining in the community and place they call home for as long as they choose,” said Medina.

Since 2004, Heartland has helped more than 27,900 Australians to live a more comfortable retirement by releasing more than $1.8 billion of equity from their homes.

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