The Commonwealth Bank Reverse Mortgage will be withdrawn from sale. CBA (and its subsidiary Bankwest) will no longer offer reverse mortgage loans to new borrowers from the beginning of next year. However, it will still continue lending for current borrowers.
CBA made the decision to discontinue “Equity Unlock for Seniors” and Bankwest reverse mortgage (Seniors Equity Release) as part of the bank’s streamlining of its products to lower costs, remove duplication and simplify lending. It is the last of the major lenders to withdraw from the reverse mortgage sector amid rising costs and tougher regulation.
What is a Bankwest Reverse Mortgage Loan?
The reverse mortgage loan offered by CBA and Bankwest allows eligible elderly Australians to access the wealth of their home without the need to sell the property. The loan proceeds are generally used to improve the standards of living during retirement.
Relying on government Age Pension may not be enough to live a comfortable life when you stop working. Unfortunately, many pensioners don’t have the available cash for their daily needs, but they are living in homes that are valuable.
Rather than selling the property, seniors can unlock the home equity and convert it to cash that they can use for various needs such as debt consolidation, home renovation, aged care, and even buying a car or funding a holiday.
After the withdrawal of CBA and Bankwest from the sector, the remaining players will be P&N Bank, IMB Bank, and Heartlands Seniors’ Finance.
Are Reverse Mortgage Loans Still Available from Seniors First?
Yes. If you are over 60 years old and you need to unlock your home equity, you can still avail of a reverse mortgage loan from Seniors First. Even without Commonwealth Bank Reverse Mortgage and a Bankwest reverse mortgage, we can still provide you with options for a reverse mortgage loan.
Moreover, the decision of CBA does not only affect reverse mortgage products. The bank is also reviewing its insurance and credit portfolio as the banking industry is adjusting to tougher regulations and changing market conditions.
CBA is discontinuing its reverse mortgage loan, but the need by elderly Australians for a comfortable retirement will remain and in fact growing. In fact, CBA is projecting a 20% increase in the number of Australians who will be over 65 years old in the next 12 years.
Australian seniors are usually cut off from mainstream lending because many of them are no longer earning regular income to service the loan.
To help you learn more about reverse mortgages, you can download our FREE REVERSE MORTGAGE GUIDE.
You can also call Seniors First Finance on 1300 745 745 or post your comments below.