Boomer Home Loans mean business. The new lender aims to address the challenges faced by older Australians as they approach retirement.
You may have heard the word “boomer” to poke fun or poke fun at older people, but that’s not what Boomer Home Loans is here to do. The new specialist lender is shaking up the home loan space by being the first Australian lender to offer a range of ‘one-of-a-kind’ home loan products designed to help older Australians unlock their home equity.
Savings.com.au spoke exclusively to Scott Phillips, CEO and co-founder of Boomer Home Loans, to get an idea of the new home loan player: what it is, what products are on offer and their plans future for expansion.
“We have a unique understanding of the challenges and complexities facing older Australians,” Mr Phillips told Savings.com.au.
“About one in three older Australians don’t think their savings and income will be enough to cover their lifestyle for the rest of their lives.”
Mr Phillips said that while some older people have a super they can fall back on, many reach retirement age without any super – but that’s where Boomer Home Loans hopes to step in.
“We’ve designed our products to be flexible so our customers can tailor their financing to their current life stage and future lifestyle aspirations,” he said.
Not enough love for baby boomers in home lending
When asked why Boomer Home Loans was founded, Mr Phillips said customers over the age of 55 struggled to access home loans, which often required them to sell their family home, work longer or to tap into their super – but Boomer wants to give older Australians a good run.
“We know that many hard-working Australians retire with their home equity as their most valuable asset and not enough savings or superannuation to support another 40 years of living expenses,” said Mr Phillips.
“At the same time, millions of Australians have retired and still owe money on their mortgages.
“The market is flooded with options for first-time home buyers and young borrowers in the prime mortgage market, but we’ve seen the over-55s not getting the attention they they deserved.”
Boomer Home Loans offers four home loan products – from your “typical” home loan to reverse mortgages – including the first “hybrid” mortgage:
Erase Boomers: A home loan designed to help those over 55 pay off their mortgage before retirement
Boom switch: A “hybrid” home loan that lets baby boomers refinance their home loan and then “withdraw” your home loan repayments when you stop working
Reverse woofer: A reverse mortgage that lets you continue to own and live in your home, tapping into its equity for a “comfortable retirement”
Boomer Lite: A reverse mortgage with similar features and parameters to the federal government’s Home Equity Access Program
Mr Phillips said that although they offer two reverse mortgages, it is Boomer’s ‘pre-reverse’ mortgages that are the lender’s ‘key differentiator’.
“These mortgages will help clients manage their home loan needs late in their working lives, and then our reverse mortgage product will take over in retirement,” he said.
“We offer fast, flexible and customer-friendly home loan services for over 55s, with ongoing advice and annual checks.
“In addition, we provide all eligible customers with a no-cost Boomer home loan plan that takes into account individual circumstances and provides clear insight into how a new home loan might work – ensuring that every customer not only gets a loan , but also get a clear path and an exit strategy.
Not a “generalist” bank for everyone: “At Boomer, age is not a barrier”
The idea for Boomer Home Loans didn’t come to Mr. Phillips in a fever dream — and this isn’t his first rodeo in the reverse mortgage business. In his previous business venture, Smooth Retirement, he offered reverse mortgages and financial planning services to older Australians.
“Our previous business, Smooth Retirement, was an online reverse mortgage broker, distributing the products of other lenders and we very quickly realized that there was a significant opportunity for a specialist lender over 55 years old with a modern service. online and new products,” said Phillips.
“That’s why we created Boomer Home Loans.
“At Boomer, age is no barrier…our company was created specifically to provide loans to seniors.”
While Smooth Retirement provided both financial planning and mortgage brokerage services, Boomer Home Loans will be strictly a home loan provider.
So why did Mr. Phillips go in this direction? What prompted them to shake up the 55+ home loan space rather than just offering the products of other lenders?
For context, the Australian Securities and Investments Commission (ASIC) introduced significant regulatory changes to the reverse mortgage industry in 2012. In 2018, ASIC published a review of these changes and mortgages reversed. This review revealed that some customers did not fully understand the features of their reverse mortgages, particularly compound interest and the potential for declining equity.
“Boomer was inspired by this and our model was specifically designed to provide service focused on educating customers, accessible and easy to understand information, and customer-centric, ‘straight-talking’ service without jargon. “said Mr. Phillips.
“We provide all of our eligible customers with an Individual Baby Boomer Home Loan Plan that details how their new home loan will work for them over time and what it means for their home equity and situation. overall financial.
“We see there will be more reverse mortgage lenders entering the market”
Boomer Home Loans will launch in April 2022 for customers directly and then through licensed mortgage brokers in August 2022.
“We see there is a significant unmet need in the market for our new specialist home loan products and services for the over 55s, designed specifically to help older Australians overcome their home loan debt as well as to access adequate funding for all. their retirement years by unlocking some of the equity they have built up in their home,” Phillips said.
“We believe there are substantial growth opportunities in the Australian seniors loan market with a growing, asset-rich and often cash-poor aging population.”
Markets like the UK and Canada are “good examples” of Australia’s growth potential, according to Phillips.
“We believe there is huge demand for reverse mortgages and other credit products for the over 55s and that they will become increasingly popular in Australia, as they have overseas. “, did he declare.
“For this reason, we see more reverse mortgage lenders entering the market in the future and we welcome and look forward to the growth of this sector.”
Image by Christian Bowen on Unsplash