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A study from Seniors First revealed that there has been a 300 per cent rise in reverse mortgage inquiries over the last two years.
While there has been immense growth, confusion among borrowers remains due to confusing policies and a lack of transparency.
The same study claimed that among the top four reverse mortgage providers in Australia, there are over 150 variables.
This includes loan features, eligibility criteria, fees, and policies, all contributing to the confusion for senior borrowers.
Seniors First CEO Darren Moffatt said the reverse mortgage market is “more complex than ever” due to these points of difference.
“That level of complexity is overwhelming for many over-60s who are simply trying to access the equity in their homes for cash, without making a costly mistake,” he said.
“From differences in drawdown limits and interest rates, to rules around property types and age-based loan eligibility – it’s a minefield. For example, one lender might impose restrictions around the cash reserve feature that another doesn’t, or they might scale back the available loan amount based on property type or location.”
The role of a broker in supporting seniors with their reverse mortgage journey is as important as ever.
Moffatt noted that with reverse mortgages especially, there is no “one-size-fits-all” loan. Each circumstance is entirely unique.
He said most of the eligibility criteria aren’t public. Brokers can support seniors by unearthing the “hidden” components.
[Related: Connective launches white label reverse mortgage]
