ABN AMRO launches new reverse mortgages
ABN AMRO has launched two reverse mortgage products designed to be sold by financial planners.
The bank is projecting up to 33 per cent sales by financial planners for its new Accommodation Bond Loan (ABL) and Investment Property Mortgage (IMP) — compared to the industry norm of about 10 per cent.
Head of reverse mortgages Martin Lynch said the products are unique in the market in being “designed with financial planners in mind at the outset”.
“Also, reverse mortgages in general are experiencing a rapid growth in take-up by financial planners.”
Lynch said planners could play a key role in negotiating the level of the bond on behalf of clients, as well as advising clients of any potential taxation and Centrelink benefits that may accrue to them from the products.
The key feature of the ABL, which is designed to cover the cost of moving into aged care, is that clients can borrow up to 50 per cent of the value of their property (as long as they are aged over 60).
“This is essential as standard LVRs [loan to value ratios] were not typically enough to cover the cost of the bond,” Lynch said.
Key features of the IMP are that clients can borrow an unlimited amount — from a minimum of $10,000 — against the value of their investment property.
Lynch anticipates customers will use this facility to invest money into their superannuation following last year’s super changes, and also to fund moves into retirement villages.
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