Although a number of prominent lenders have left the market over the last eighteen months due to the global financial crisis, a new study has found that the reverse mortgage market continues to grow with total loans now exceeding $2.7 billion.
The SEQUAL report found that reverse mortgages increased by 4 per cent in the 6 months to December, and 9 per cent in the 2009 year. There were more than 2,665 new reverse mortgages originated in the second half of 2009. In addition, the average loan size has increased from $51,000 in 2005 to $70,000.
SEQUAL CEO, Kevin Conlon, said that the perception of reverse mortgages amongst retirees has been steadily improving amongst retirees over recent years, and that the trend towards home equity release was inevitable due to the rapidly ageing population.
"Attitudes towards retirement funding are changing. The home is increasingly being considered a part fo the planning process with equity release being seen as a means to unlock the substantial wealth stored in property."
The report also found that ‘home improvement’ was now the most popular purpose amongst reverse mortgage borrowers.
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