ASB is no longer offering HomePlus reverse mortgages to new customers.
A spokeswoman for the bank confirmed ASB closed HomePlus to new business from this week. Existing HomePlus customers can, however, continue to use reverse mortgages.
"Since its launch in 2010, ASB HomePlus has been a satisfactory product for the many customers who have used it to borrow against part of the equity they have in their home," the ASB spokeswoman said.
In terms of why ASB's quitting reverse mortgages, the spokeswoman said because they're considered a niche product and the bank "has decided not to continue offering it to new customers at this time."
She wouldn't say how many existing reverse mortgage customers ASB has, nor what the total value of their loans was, saying this was commercially sensitive.
Reverse mortgages, or reverse equity mortgages, enable asset rich but cash poor elderly home owners to borrow money against part of the equity they have in their home. (See more on them here).
After ASB's pull out Heartland Bank and SBS Bank are left among banks offering reverse mortgages.
In 2010 ASB's head of customers, markets and products, Catherine McGrath, said the bank was introducing HomePlus in response to demand from senior citizen customers.
ASB's pull out comes at a time the Reserve Bank is looking to introduce specific bank capital rules for reverse mortgages. The Reserve Bank estimates there are about $400 million to $500 million worth of reverse mortgage assets held by New Zealand banks.
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