The Australian reverse mortgage market has continued its trend of recent years, with a fall in settlements, an increase in discharges and modest growth in the value of outstanding loans in 2014.There were 39,867 reverse mortgages on issue at the end of last year - down from 41,435 a year earlier. The average loan size was A$92,000 - up from $86,000 in 2013.Settlements fell from $302 million in 2013 to $272 million at the end of last year, while discharges rose from $504 million to $555 million. About 3400 new borrowers took out a reverse mortgage in 2014, while 4900 borrowers repaid their loans (representing 12 per cent of total borrowers).Reverse mortgage balances stood at $3.66 billion at the end of last year - up 2.8 per cent from $3.56 billion at the end of 2013.Deloitte financial services partner James Hickey said that when the product first came onto the market it was marketed as a way of supplementing retirees' income. "But people also saw that they could use it to borrow a lump sum for discretionary spending," Hickey said."Over time, that use has become dominant. It probably reflects the fact that we do not have a big annuity culture in this country."Hickey said changes to aged care accommodation payments that came into effect in July last year, introducing greater flexibility into the system, were generating more interest in the use of reverse mortgages to finance accommodation bonds."It is still early days but the opportunity is there," Hickey said.Brokers and financial planners settled 31 per cent of loans last year, with the balance settled through direct channels.People aged 70 to 79 make up 49 per cent of the market, with 75 the average age of new borrowers.