Institutional investors have backed Household Capital’s $304 million securitisation, bolstering funding for Australians accessing their housing wealth.
Household Capital, an Australian home equity retirement lender, has completed a $304 million mortgage securitisation to support retirees’ funding needs and ongoing customer drawdowns.
Announced on 20 October, the HHC 2026-1 RMBS Trust transaction attracted new Australian superannuation investment alongside domestic and offshore insurance, banking and institutional credit fund investors.
Household Capital said demand exceeded twice the transaction’s size and comes amid record Australian residential mortgage-backed securities (RMBS) market activity.
Citi arranged the deal and acted as joint lead manager alongside Macquarie Bank.
Household Capital CEO Joshua Funder positioned the transaction as progress for both borrowers and the retirement lending market.
“Our latest innovative mortgage portfolio securitisation is a great outcome for Australian retirees and a big step forward in the evolution of the sector,” he said.
Funder also linked institutional access to the lender’s capacity to expand its retirement funding program.
“We are delighted to work with Citi and Macquarie in delivering the high quality of our customers and the low-risk nature of our mortgages to local and global investors. Our scalable securitisation program is essential to sustainably scale retirement housing and funding and help Australians meet the challenge of an aging population,” he said.
Building a repeat funding platform
The deal follows Household Capital’s inaugural 2024-1 transaction and its $270 million 2025-1 issuance, extending a program supporting borrowers’ continuing access to approved home equity funding.
Proceeds support drawdowns within existing approved amounts and potential future increases to credit contracts.
The funding model accommodates loans whose cash flows differ from conventional mortgages. Reverse mortgage borrowers generally do not make regular repayments, with interest added to their balances.
Morningstar DBRS said the transaction was backed by Australian residential reverse mortgages, underscoring the connection between institutional capital and retirement lending.
Funder said the breadth of investor participation reflected a distinctive approach to accessing housing wealth.
“We were delighted to attract strong, global, diverse investor demand for our securitisation. The way Australian retirees access the wealth in their homes using a Household Loan is different from comparable approaches here and elsewhere,” he said.
“The rating on our portfolio reflects a series of key differentiators of Household Capital equity release mortgages: higher voluntary discharge, shorter duration, lower negative equity risk and relatively higher cashflows.”
Expanding retirement funding
Household Capital chair Paul Rogan said that mortgage securitisation could play a broader role in meeting an ageing population’s funding requirements.
“The securitisation of our mortgage portfolio is a major evolution in providing billions of dollars each year in additional funding for an aging population,” he said.
Household Capital said compliance with international risk-retention standards supported the securities’ appeal to global investors.
It intends to list the senior notes on the ASX following the transaction.
[Related: Household Capital completes Macquarie reverse mortgage acquisition]
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