Reverse mortgage operation Bluestone Equity Release has expanded into New Zealand, backed by funding from Westpac Institutional Bank.
The move across the Tasman has been motivated by commissioned research estimating that the rapidly growing New Zealand market will reach $200 million in 2007.
The Trowbridge Deloitte research reveals retirees have a “substantial need for quality reverse mortgage products”, according to Bluestone chief executive Peter McGuinness.
“There is more than $71 billion tied up in homes owned by the country’s over-60s, yet many will find themselves inadequately funded as living costs rise and life expectancy climbs.”
The research found retirees have less than $60,000 in retirement savings per household on average, well short of the estimated $300,000 to $400,000 required to secure a fully funded retirement.
It also estimated that the Government’s superannuation would provide just 50 per cent of the income required to support an acceptable standard of living in retirement.
Bluestone’s emergence will also “significantly broaden the range of products available in a market that is currently dominated by one player”, McGuinness said.
He added that Bluestone’s key point of difference would be to “provide customers with certainty around the funds being released from their home”.
“For the first time, for example, NZ retirees have access to a lifetime fixed or capped interest rate on their reverse mortgage, providing protection against long-term volatility in interest rates.
“These features ensure clients have the security of knowing the maximum balance of their loan in 10, 20 or 30 years time, providing more certainty around estate planning.”
