The lender has launched its new product, the Second Property Loan, off the back of strong growth.
Heartland will provide reverse mortgages to over 60s on second homes, investment properties and holiday homes.
The product is aimed at people who may not want to release equity from their main residence.
The money can be used for home improvements, debt consolidation, travel or bills, and the firm is offering the same guarantees as its main reverse mortgage lending products.
The new product line comes amid significant growth for Heartland, as reverse mortgages become more popular on both sides of the Tasman.
Heartland Bank announced its half-year results this week, and recorded a 10% increase in its New Zealand reverse mortgage book as consumers become more aware of equity release products.
Heartland posted its results for the six months to December, with group net profit of $39.9 million after tax, an increase of 20.4% on the comparable period the year before.
Receivables grew by 8% year on year to $4.46 billion, and the finance group and bank recorded a return on equity of 11.7% for the year.
A growth in reverse mortgages here and in Australia was a key reason for the profit boost and revenue increase, the company said.
New Zealand reverse mortgages receivables grew $26 million, 10% growth year on year. NZ reverse mortgage net operating income rose to $13 million, up $2.7 million.
Andrew Ford, head of retail, told TMM Online the reverse mortgage growth was mainly down to increased awareness in NZ.
He said customers ranged from 60-90 years of age, and tended to use the cash to renovate homes, make retirement more comfortable, and provide extra income for expenses.
Ford said low interest rates have put downward pressure on retirees’ term deposit income, leading some customers to seek additional funds.
“They are having to eat into savings or tighten their belt. Reverse mortgages are a way to maintain the lifestyle they desire and deserve. It can be transformational.”
