Heartland Reverse Mortgages

Heartland Reverse Mortgage aims to make life comfortable for ageing Australians during their retirement by providing them with the best financing options.

Formerly known as Heartland Seniors Finance, Heartland Reverse Mortgage is one of the leading providers of retirement financing in Australia and New Zealand.

It was originally founded in 2004 as part of the wider Heartland Finance, which has been in the business of providing financial services since 1875.

Since its inception, Heartland Reverse Mortgage has helped more than 22,000 Australian seniors access over $1.3bn in home equity to live comfortably in their retirement.

What is a reverse mortgage?

A reverse mortgage is a way for seniors to access the equity that’s tied up in their home. A reverse mortgage is a type of equity release product that allows seniors and retirees to borrow money by using the equity in their home as security for the loan.

What loan features does Heartland Reverse Mortgage offer?

Heartland Reverse Mortgage has a commitment to providing custom-tailored options that fit the specific needs of seniors and retirees. Here are some of the features of its reverse mortgage product:

• Flexible drawdown option: Retirees can get their funds through a one-time lump sum payment; ongoing advances that can be set monthly, quarterly, or annually; and by having a “cash reserve” facility for future access.

• Repay without penalty: While reverse mortgages do not require regular payments, clients can repay their loan if they wish to.

• Equity Protection: Clients have the option to have a certain percentage of the equity protected, allowing them or their estate to receive the sale proceeds upon repayment and discharge.

• Secondary Property Loan: Clients can use their investment property or holiday home as security for their reverse mortgage.

• Aged Care Option: This allows clients to still receive funding even if they no longer reside in their home and are already in residential care.

What drawdown options are available at Heartland Reverse Mortgage?

Heartland offers flexibility with its three drawdown options for its reverse mortgages.

1. Initial advance: In this option, clients are given a minimum lump sum payment of $5,000 at the start of their loan. This is ideal for those who want to have immediate access to a fund that they can use for renovation, purchase of a new car, or a vacation. Future funds are available as needed.

2. Regular advance: This option is for those who see reverse mortgage payments as a supplement to their income. Clients can set a regular payment which they can receive monthly, quarterly, or annually for up to 10 years. Minimum payments are set at $300 per month, $625 a quarter or $2,500 annually.

3. Cash reserve: Clients can set a cash reserve for their funds which they can use in the future. They can submit a request form if they want to get access to the funds in their reserve. The minimum drawdown for every request is $2,500.

Take note that interest is charged only to amounts that have already been drawn down. Funds still in the cash reserve, for instance, are sitting idly and are not being charged with interest costs.

How much can you borrow from Heartland Reverse Mortgage?

The amount you can borrow from Heartland Reverse Mortgage will depend mainly on your age upon applying and the value of your home.

For Heartland’s Standard Reverse Mortgage and Aged Care Option, borrowers aged 60 can borrow a maximum amount equal to 20% of their properties value.  The maximum amount as a share of the property value increases depending on the clients’ age.

Standard Heartland Reverse Mortgage

If the security is an investment property or a holiday home, the maximum amount is reduced by 25% for the Standard Reverse Mortgage and 10% for the Aged Care Option.

How can you be eligible for a reverse mortgage at Heartland?

Homeowners who are at least 60 years old can apply for a reverse mortgage at Heartland.

As for the residential property that will be used for the reverse mortgage, it must be of conventional construction, in good condition, and mortgage-free.

Residential properties in retirement villages will not be considered as security for a reverse mortgage at Heartland.

Frequently Asked Questions about Heartland Reverse Mortgages

How is interest calculated for Heartland reverse mortgages?

Interest will be charged on your loan balance at current variable rates. This will allow you to make repayments without any penalties. Any rate changes will be communicated by Heartland.

Will you still own your home?

When you take out a reverse mortgage, you will still own and live in your home for as long as you wish.

Can you rent out your home?

It depends — if the reverse mortgage is taken out with an investment property as security, you can rent out the property as long as it satisfies the requirements set by the provider. However, renting out an owner-occupied property still needs further discussions and approval from Heartland.

How is the loan repaid?

You will not be required to make regular repayments when you take out a reverse mortgage. Instead, the total loan amount, including the interest and all fees, will be repaid once you sold the property, move into long-term care, or pass away.

Can I increase my loan amount?

Your age and the value of the property will determine the maximum amount you can borrow based on a certain percentage of your home’s value. You may request to increase your loan amount but this would depend on the current property value, the total loan balance, and the age of the youngest borrower (if you are applying with someone else).