Reverse Mortgages and Older People: Growth Factors and Implications for Retirement Decisions [Positioning Paper]

The project seeks to determine the factors influencing the take up of reverse mortgage products and services within the context of overall demand. This research project focuses on provision of a comprehensive appraisal of reverse mortgages as they pertain to ‘ageing in place’ and community care decision-making. Importantly, while there is considerable state and Australian Government interest, reverse equity product development has mainly been left to the banks and financial providers themselves, with the exception of a number of significant but smaller programs such as the Queensland Home Adapt Loan (QHAL). Thus this research is founded on a partnership with the Senior Australians Equity Release Association of Lenders (SEQUAL) so as to access this larger market knowledge. SEQUAL have agreed to facilitate access to their market research, databases and members enabling us to access reputable reverse equity providers. This partnership will be significant in answering questions concerning the range of reverse mortgage products available from SEQUAL members including their criteria for lending, value and intended purpose. The methodology employed in this research is a mixed method one and comprises: statistical analysis; a systematic literature review of databases most likely to identify issues; a review of policy implications of particular reverse equity approaches; analysis of current products and their promotion; consultation with both lenders and their older consumers; and case studies obtained through a series of focus groups and/or individual interviews. This Positioning Paper presents an overview of preliminary findings relating to our Systematic Literature Review, demographic analysis, and analysis and overview of the Australian regulatory landscape and National and International initiatives as they impact both growth for the market and retirement decision making. It established the variables and assists in refinement of our methodology for the second phase of this research. In the Final Report we will present the results from our Survey, and analysis of products based on interviews with providers and older consumers.