Over-55s home loan lender set to launch

Founded by two former directors of financial services company Smooth Retirement Group, Scott Phillips (now Boomer Home Loans chief executive) and Jacqui Schofield (Boomer Home Loans executive director), the lender aims to “address the financial challenges facing millions of older Australians across the nation”, particularly those struggling to repay mortgage debt, refinance to a lower rate, or wanting to top up income in retirement.

According to the fintech, more than one-third of borrowers aged over 55 are paying interest rates on their home loans of more than 4 per cent, with their pension being their main income source. 

Given that millions of Australians enter retirement still paying off their mortgage – or do not have enough in savings or super to support another 40 years of living costs – the new lender aims to help provide more solutions to enable older borrowers to ease their financial burden in retirement. 

Boomer Home Loans – named in reference to its target age demographic, Baby Boomers (i.e. those born in the post-WWII baby boom of the 1950s and 1960s) – is still believed to be in the process of finalising terms with a “large pension fund” in relation to debt funding for its reverse mortgage loan book. 

Once finalised, the lender will offer reverse mortgage products, as well as other products that help borrowers aged over 55 with pre and post-retirement solutions.

The start-up has raised more than $13 million, with investors including former BNK Bank CEO Simon Lyons (who sits on the board of Boomer Australia Limited), property management fintech entrepreneur Jindou Lee from HappyCo, and former Fortescue Metals Group chief financial officer Stephen Pearce.

It is currently in a Series B round to raise a further $4.3 million before launching into market in April.

Boomer Home Loans has said that it will launch into the broker and aggregator market by August 2022, under the leadership of Wade Westphal-Groves, Boomer Home Loans’ head of third party.  

Speaking of the impending third-party channel launch, CEO Mr Phillips commented: “We know that mortgage brokers are trusted by millions of older Australians, writing two-thirds of all residential mortgages across the country. 

“We are investing in developing the right service for the broker and aggregator community as part of our go-to-market strategy. 

“We believe that Australians over 55 deserve a better deal. They deserve a home loan lender that not only understands their unique needs but will help them plan and manage their finances in the lead-up to, and throughout, retirement.  

“Boomer is Australia’s first over-55s specialist home loans provider and is here to change later-life lending for good.” 

Mr Phillips added the gap in financial services for people aged 55 and over was a significant national problem. 

“While the recent surge in Australian house prices has pushed household wealth to record highs, many older Australians are struggling to make ends meet,” Mr Phillips said.  

“A lack of super or savings means many are scraping by week to week, while unexpected large expenses often force older Australians to sell their family home to access the capital they need.  

The focus on supporting older home owners to manage finance in later life has been a key point of focus recently.

The federal government has been considering how it can support older Australians to make better use of their property assets and fund retirement in recent years, and earlier this year revamped the Home Equity Access Scheme that enables older Australians to draw a fortnightly payment using the equity in their home. 

Other work that has been going on in this space recently include Deposit Power and Downsizer.com’s new cashless deposit bond for empty-nesters wishing to transition to a new off-the-plan dwelling, and non-bank lender Heartland raising its loan-to-value ratio limits for reverse mortgages in a bid to help more borrowers access finance.

[Related: Heartland raises LVR limits for reverse mortgages]