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The demand for aged care finance will “dramatically increase” over the coming years as the Australian population ages, the chief lending officer of a specialist lender has predicted.
Brokers are likely to find aged care loans becoming more necessary and mainstream in the “not-too-distant future” according to Cory Bannister, the vice president and chief lending officer of La Trobe Financial.
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“There will also be more aged care facilities built to meet the demand and more and more loans will be required,” Mr Bannister explained to The Adviser.
La Trobe Financial officially launched its aged care finance offering in February this year with its Aged Care Loan product, which is designed to specifically fund the payment of the Refundable Accommodation Deposit (RAD) required for individuals moving into aged care facilities.
The lender noted that the RAD can commonly exceed $500,000, which families can find difficult to finance.
La Trobe’s Aged Care Loan lends up to 50 per cent LVR against the borrower’s primary residence and allows interest accrual for part of the loan life.
He explained that for brokers, their client is usually the 45 to 65-year-old, “the person who is appointed the Enduring Power of Attorney”.
“The broker ought to have a reasonable grasp of the aged care sector to be able to offer an appropriate service to their clients,” he elaborated.
“The amount needed to fund moves into aged care is already $3 billion per year. With demographic changes this will grow rapidly too, so a lending solution that helps customers and aged care providers will naturally grow as understanding and awareness of this option also grows.”
[Related: eChoice flags major ‘shift’ in borrower demographics]
