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Reverse mortgages have increased in popularity with older Australians, a new study has found.
According to the report by Deloitte Actuaries and Consultants, the local reverse mortgage market grew by 13 per cent over the last financial year, measured by outstanding balances after 4,950 new borrowers entered the market.
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The average age of the reverse mortgage borrower is 74, the report said.
The report also found that the main reason for taking out a reverse mortgage was to receive a regular income stream in retirement, followed by debt repayment and home improvement.
Senior Australians Equity Release Association chief executive, Kevin Conlon, said the report showed borrowers were using their reverse mortgages appropriately – with many choosing to repay their debt in full each year rather than let the debt build up until death.
"Senior Australians are continuing to show restraint when releasing equity through reverse mortgages, shown by borrowers, on average, only choosing to access about 70 per cent of the actual funding available to them," Mr Conlon said.
