Demand may be emerging for the shared equity loan marketed by Adelaide Bank and Rismark following a slow start since the product's debut in early 2007.Jamie McPhee, chief executive of the wholesale division of Bendigo Bank (largely the former Adelaide Bank) told a media briefing last week that sales of the equity finance mortgage, as the bank styles the loan, reached $25 million. Taking into account more recent approvals, volume to date may exceed $30 million.Mike Hirst, CEO of Bendigo's retail bank, said HomeSafe, an alternative form of shared equity product, exceeded $50 million. Bendigo first marketed the HomeSafe product almost three years ago.Bendigo has invested in newspaper advertising for the HomeSafe product over this period (and especially in recent months) while the equity finance mortgage has had little paid marketing, with demand driven by public relations and the efforts of the small number of mortgage managers credentialed to sell it.The equity finance mortgage is a unique product in the Australian mortgage funding landscape. The loans are sold as a second mortgage (rather than a direct equity stake) and are sold only in conjunction with a first mortgage from Adelaide Bank. Adelaide licenced the intellectual property from Rismark International.Under an EFM the bank (or really a fund managed by the bank) finances a second mortgage equal to a stake of up to 20 per cent of a borrower's home. There is no interest rate.After 25 years, or upon the sale of the home, the borrower repays the loan and also pays a proportion of the capital gain to Adelaide Bank. In the case of a 20 per cent stake as shared equity, the Rismark fund would take a 40 per cent share of the gain (on top of repayment of the principal). Lower percentages apply on smaller loans and the bank would also share (though to a lesser extent) in any loss in value. The equity finance mortgage may be a tough sell, largely due to its novelty and complexity.The EFM was originally made available only through 11 mortgage managers and is still not available through Adelaide Bank's broker channel. Adelaide Bank's retail branches have only recently begun to market shared equity. Nor does the bank pay any commissions to brokers (who do, however, earn commission on the first mortgage).Until late last year the interest rate on the variable rate Adelaide loan was higher than the bank's standard home loan rate and the bank still won't discount this rate (as another lender might). The bank would not write the first mortgage at fixed rates until recently.Nor could customers use the EFM for cash-out or investment purposes last year, though this is now an option.Since the maximum loan to valuation ratio on an equity finance mortgage is 20 per cent and the average property value in Australia is around $450,000, the average EFM loan may be around $90,000.Since the EFM would represent about 20 per cent of the total financing package Adelaide Bank may have originated about $150 million of traditional