Greenway provides equity mortgage

property mortgage

22 September 2006
| By Darin Tyson-Chan |
image
image
expand image

Justin Greiner

Greenway Capital is set to launch an equity mortgage product into the market that will allow the family home to be used in a more flexible manner to help consumers achieve their financial goals.

The product will provide consumers with capital ideally to the value of 30 to 40 per cent of the total value of their home without the burden of repayment until the property is either refinanced or sold.

No interest is included as part of the arrangement, with Greenway accepting a share of the capital gain materialised on the sale of the property instead. This share can be anywhere between 30 and 50 per cent.

“There’s tremendous flexibility in this product. You can use it as a standalone product, or you can package it up with a traditional interest charging mortgage,” explained Greenway head of distribution Justin Greiner.

Greenway has specifically targeted four segments of the consumer market to which it will pitch its product.

These include consumers who want to rid themselves of mortgage repayments in order to use their funds for other purposes, people wanting to upgrade their home while keeping their debt repayment obligations at the same level, people looking to boost their wealth creation activities by freeing up capital in their home, and retirees looking to supplement their potentially inadequate retirement savings.

In the event that the sale of the mortgaged property returns a capital loss, the product takes the form of an interest free loan, with only the original principal requiring repayment.

Greenway has been selective in the distribution channels it has selected for its equity mortgage.

“The key to this product is to make sure you’ve got properly trained and accredited distributors. To become accredited in the Greenway product we’re talking about accreditation that might take two or three hours, as opposed to a traditional accreditation for a fund that might take 45 minutes,” Greiner said.

The property finance firm has also been conscious of consumer protection issues in formulating the offering.

“Legal advice will be required [before taking out the product], and financial advice will be required to release equity. That’s a standard that doesn’t currently exist in the space,” Greiner said.

To that end, Greenway is ensuring its equity mortgage complies with the Senior Australians Equity Release Association of Lenders’ code of conduct due to the equity release nature of the offering.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 3 weeks ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 3 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 3 weeks ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 week 2 days ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

4 weeks 1 day ago

The Reserve Bank of Australia's latest interest rate announcement has left punters disheartened on Melbourne Cup Day....

1 week 1 day ago