What actually moved this week

Household Capital, a non-bank lender built around retirement funding, has appointed Natalie Sheehan as its chief growth officer, with a remit covering revenue and market expansion and an explicit focus on the broker channel and strategic partnerships. The appointment was reported by Australian Broker on 29 October and by The Adviser on 5 November. Sheehan arrives from Bendigo and Adelaide Bank, where she spent more than three and a half years as head of broker and strategic partnerships and chaired the bank’s broker compliance committee; before that she led distribution at Brighten Home Loans from 2020 to 2023, following earlier roles at Resimac, Pepper Money and Resicom Financial. Australian Broker reports the hire follows a $304 million securitisation, the lender’s third, and puts its contracted book above $1.2 billion since it began originating in 2019. Josh Funder is chief executive.

That is a specific kind of hire. A lender does not recruit a bank’s head of broker and strategic partnerships, who also chaired its broker compliance committee, unless it intends to be assessed by aggregators and by broker compliance teams.

In the same week, Broker Daily’s lender policy round-up for 29 October to 5 November reported that Bluebay Home Loans had introduced two reverse mortgage products to the channel. On that round-up’s account, Bluebay Life is available to owners aged 55 and over for loans from $50,000 to $3 million, with lump-sum or drawdown access, interest charged only on drawn funds, and consolidation of up to five unsecured debts. Bluebay Life Plus runs from $50,000 to $5 million and is described as covering more complex cases, including multiple debts such as ATO and land tax liabilities, with more flexibility on property location. We have not seen these product terms confirmed outside that round-up, so treat the detail as Broker Daily’s reporting and confirm the current terms with the lender before you quote anything to a client.

The timing is not a coincidence

On 3 November the Reserve Bank raised the cash rate target by 25 basis points to 4.85 per cent. The decision was taken by majority: six members voted for the increase and three voted to leave the target unchanged at 4.60 per cent. The Board said inflation “remains elevated and recent data indicate that it is broadly based”, warned of “an increasing risk that higher inflation expectations will become embedded”, and said inflation “is now forecast to remain elevated through much of 2027”. Its stated reasoning was that “a further tightening in financial conditions is warranted”.

Read that through the lens of a client in their late sixties. They are asset-rich and income-constrained, and the cash rate has now risen five times in 2026. A standard refinance or a line of credit is a serviceability conversation they increasingly cannot win, and the equity sitting in the house is the only part of their balance sheet that has not been repriced. That is precisely the client a reverse mortgage is designed for, and precisely the client for whom getting it wrong is least recoverable.

Equity release reaching more broker panels is not a marketing cycle, then. It is a product moving toward demand that monetary policy created — and brokers who have never written one are about to be asked about them.

Part 3-2D: the obligations that attach to these files only

Most of what brokers know about credit obligations comes from the responsible lending framework and from the best interests duty. Reverse mortgages have those, and then a further layer. The National Consumer Credit Protection Act 2009 contains a Part headed “Licensees and reverse mortgages” — Part 3-2D — that exists solely for this product. Its sections are:

Two things stand out in that list for a broker rather than a lender. The heading of s 133DB names credit assistance expressly, which is what brokers provide. And ss 133DC and 133DD name the website of a credit assistance provider, not only the credit provider — which is to say the information statement obligation contemplates the broker’s own website, not just the lender’s.

Those are headings, not the full operative text, and this is general information rather than advice on your situation. Before your first file, have your licensee or compliance adviser walk you through how Part 3-2D applies to your authorisation and your process.

Three scenarios, and the order they come in

The s 133DB obligation is given practical shape by ASIC. In Information Sheet 185, Using ASIC’s reverse mortgage calculator, ASIC states the obligation in plain terms: “If you are a credit licensee, you must use the calculator to make equity projections to show a consumer before you make a preliminary or final assessment of unsuitability.” ASIC says it has approved the calculator webpage and its instructions for the purposes of s 133DB(1)(a) of the National Credit Act and reg 28LD(2) of the National Credit Regulations.

Note what that sentence does. It is addressed to credit licensees, and it is keyed to the preliminary assessment as well as the final one. A broker providing credit assistance makes a preliminary assessment of unsuitability under ss 118 and 131, after making reasonable inquiries under ss 117 and 130. On ASIC’s formulation, the projections come before that step — which means the obligation sits inside the broker’s workflow, not downstream in the lender’s.

ASIC’s instructions require three scenarios:

On the mechanics, ASIC says projections may be shown in person or given by mail, email or another written or electronic method the consumer agrees to; that a separate printed projection of each scenario must be provided; that printed copies given to consumers should be in colour; and that the consumer should have reasonable time to review them. The projections default to a 15-year period, which may be adjusted to reflect the consumer’s expected life expectancy.

The lender dropdown is a compliance control

One detail in INFO 185 reads like a user-interface note and is not. ASIC says brokers must select the lender whose reverse mortgage they are assisting with, so that the correct lender limits apply — the selection drives the LVR, the minimum borrowing age and the maximum loan amount used in the projection. A generic “Other (no loan restrictions)” option exists but ASIC frames it for limited circumstances.

The consequence is that a projection run on the wrong lender is not a near-enough document — it is built on limits the client will never be offered. Two brokers can print confident colour projections for the same client and the same house, and if one has the lender selection wrong, that file describes a loan which does not exist.

The other inputs ASIC lists belong in a checklist rather than in memory: the age of the youngest borrower; the current home value, supported by an independent valuation, council rates or recent comparable sales; the annual property value change, defaulting to 3 per cent; the borrowing plan, with non-recurrent lump sums limited to five; the interest rate and fees; and the client’s circumstances, including non-borrowing tenants, scheme eligibility and effects on Centrelink payments. ASIC also points to reg 28LC’s presumptions of unsuitability when entering payment amounts.

One wrinkle for currency: INFO 185 refers to Pension Loans Scheme eligibility. That government scheme is now the Home Equity Access Scheme, per the Department of Social Services. The input is the same question; the name on the client’s side of the conversation has changed.

Negative equity protection is the lender’s guarantee

Reverse mortgages carry a statutory negative equity protection, which ASIC locates in Part 5, Subdivision 1-A of the National Credit Code and describes as meaning that borrowers cannot owe more than the market value of their secured property when it is sold, with any amount received above that value returned. It was part of the enhanced consumer protections the Australian Government introduced in 2012.

It is a genuine protection and worth explaining to a client. It is not a substitute for the projections. The guarantee addresses the worst tail outcome — the debt exceeding the house — and says nothing about the outcome that actually turns up in complaints: a client who kept the house and lost the equity they were going to use for aged care, a move closer to family, or a grandchild’s deposit. Published analysis of the Code also notes the protection does not apply where the debtor has engaged in fraud or misrepresentation in relation to the reverse mortgage, which is a further reason the file’s accuracy matters.

What ASIC found the last time it looked at these files

ASIC’s Report 586, Review of reverse mortgage lending in Australia, was published in August 2018. It is the most substantial regulatory look at this product in the Australian market, and it is eight years old — so read it as a guide to where files fail, not as current market data.

Its central file-quality finding is the one to sit with. About 92 per cent of the loan files ASIC reviewed did not record the borrower’s possible future needs in sufficient detail, and contained no evidence that the broker or lender had discussed how the loan could affect the borrower’s ability to afford those needs. That is not a finding about rates or disclosure documents. It is a finding about a file note that was not written.

The report also recorded a channel difference in loan size: broker-originated reverse mortgages averaged $147,646 against $106,373 for loans written directly. ASIC was explicit that it did not statistically control for differences between borrowers, so the gap is not in itself evidence of anything about broker conduct — borrowers who seek out a broker may simply be different. ASIC noted that its earlier Report 516 had found broker-channel borrowers obtained higher LVRs and larger loans. The reason to know the number is not guilt; it is that a regulator reviewing this channel will have it in front of them, and a larger average loan is a reason to expect the future-needs documentation to be better, not thinner.

Two other findings are useful context. ASIC said reverse mortgages are subject to a higher standard of investigation and verification. And it found guidance providers, brokers among them, reluctant to advise on the product at all — citing negative perceptions, limited product awareness and a wish to avoid straying into unlicensed credit assistance. That reluctance is the gap this distribution push is moving into.

Where the best interests duty actually bites

The best interests duty applies here in the ordinary way. ASIC’s Regulatory Guide 273 puts it simply at RG 273.6: “you are required to act in the best interests of the consumer when providing credit assistance.” The duty sits in ss 158LA and 158LE of the National Credit Act, and RG 273.116 confirms that it “applies any time you provide credit assistance to the consumer”. RG 273.5 limits the duty to credit products regulated under the National Credit Act, which a consumer reverse mortgage is. RG 273.8 adds that the mortgage broker definition “applies regardless of the title of the person providing credit assistance”.

The paragraphs that do the real work on this product are the ones about options. RG 273.20 says that “in most instances, you should present consumers with more than one option”, and RG 273.89 that “you should present a consumer with more than one option, unless there is a good reason not to”. RG 273.80 goes further: where a different product may suit the consumer better, “you should discuss this with the consumer and recommend alternative options”.

For a 71-year-old who wants $120,000, the realistic option set is wider than two reverse mortgages. It includes downsizing, the Home Equity Access Scheme, a contribution or loan from family, and sometimes doing nothing for twelve months. REP 586 made the same point from the regulator’s side, saying guidance providers should help clients estimate the long-term effect of the loan and consider alternatives such as downsizing or family support. A file that compares two reverse mortgages and records no consideration of the alternatives has answered a narrower question than the one the client asked.

What to watch next

Three things. Whether Household Capital’s broker-channel build translates into aggregator panel additions, which is the point at which this stops being a specialist product. Whether other non-banks follow Bluebay into the segment, since a two-lender week often becomes a five-lender quarter. And whether ASIC returns to reverse mortgages — REP 586 is from 2018, the product is being pushed down a new distribution channel, and a regulator that has spent 2026 reviewing best interests duty files has an obvious next question.

The practical significance

Equity release is becoming a broker conversation because monetary policy has made it one. For some clients it is the right answer, and a broker who cannot discuss it competently is not serving an ageing client book well. But the file is different. The projections come before the preliminary assessment, there are three of them, they are printed, and they have to be built on the actual lender’s limits. The documentation failure ASIC found in 2018 was not a pricing failure or a disclosure failure; it was the absence of a record that anyone had asked what the client would need the equity for later. That record is the part of this product that sits squarely with the broker, and it is the part worth building into your process before the first one of these walks in.

Sources: Reserve Bank of Australia, Statement by the Monetary Policy Board: Monetary Policy Decision, 3 November 2026; ASIC Information Sheet 185, Using ASIC’s reverse mortgage calculator; National Consumer Credit Protection Act 2009 (Cth), Part 3-2D, current compilation, Federal Register of Legislation; ASIC Report 586, Review of reverse mortgage lending in Australia, August 2018; ASIC Regulatory Guide 273, Mortgage brokers: Best interests duty, June 2020; Broker Daily, “Broker policy round-up: Lender changes at a glance 29 October–5 November”; The Adviser, “Household Capital appoints ex-Bendigo broker head to senior role”, 5 November 2026; Australian Broker, “Ex-Bendigo broker head Natalie Sheehan joins Household Capital”, 29 October 2026; Department of Social Services, Home Equity Access Scheme.