Reverse mortgages

Reverse mortgages let older Australians borrow equity from their homes to spend in retirement. It can be a convenient way to access credit, but will reduce the amount of your home you actually own.

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Name Product Interest Rate (p.a.) Comp. Rate (p.a.) Fees Monthly Payment

Heartland Standard Reverse Mortgage P&IHome≥ 55% Deposit

Heartland Standard Reverse Mortgage
  • App: $0
  • Ongoing: $0 p.a.
A reverse mortgage for homeowners over 60 wishing to access up to 45% of their property's value. Repayments are not required until the end of the loan.

Household Capital Refinance Variable Home Loan P&IHome≥ 50% Deposit

Household Capital Refinance Variable Home Loan
  • App: $950
  • Ongoing: $0 p.a.
Borrowers over 60 can refinance to this competitive, variable reverse mortgage.

Heartland Secondary Property Reverse Mortgage P&IInvestment≥ 66.25% Deposit

Heartland Secondary Property Reverse Mortgage
  • App: $0
  • Ongoing: $0 p.a.
A reverse mortgage that lets you access the equity in your investment property. Repayments are not required until the end of the loan.

Household Capital Reverse Mortgage Variable Home Loan P&IHome≥ 50% Deposit

Household Capital Reverse Mortgage Variable Home Loan
  • App: $950
  • Ongoing: $0 p.a.
A competitive reverse mortgage for borrowers aged 60 and over. Flexible repayment options.

Heartland Aged Care Option P&I≥ 50% Deposit

Heartland Aged Care Option
  • App: $0
  • Ongoing: $0 p.a.
A reverse mortgage designed to help fund your aged care costs. Repayments are not required until the end of the loan.

Compare up to 4 providers

Reverse mortgages offer a way for older home owners to access the wealth they have tied up in their homes. You borrow money and pay back the lender either in instalments or when you sell the property. Before taking out a reverse mortgage, you need to be aware that these mortgages are not like other home loans. Reverse mortgages have higher interest rates and if you borrow too much or if your property loses value, you may find yourself in financial difficulty.

  • Always get professional financial advice before taking out a reverse mortgage.

How do reverse mortgages work?

Here are the basic facts on reverse mortgages:

  • You need to be at least 60 years of age to get one.
  • You need to have equity in your property.
  • The bank will lend you money based on this equity.
  • You repay what you borrow, plus interest, when you sell the property or pass away.

A reverse mortgage lets you unlock some of the wealth in your home now so that you can spend it to cover costs and fund part of your retirement. The key thing you need to understand is that you ultimately need to repay the debt by selling your property.

When this happens, a substantial amount of the property's value will go to the lender (depending on the interest charges and how much you borrowed). If you don't do the maths correctly you could find yourself short on cash towards the very end of your life.

And if you're planning to leave your property to your children, understand that taking out a reverse mortgage could substantially reduce their inheritance.

What is equity?

Equity is the value of a property you own, minus any mortgage debt. A reverse mortgage lets borrowers from the age of 60 convert this equity into cash.

The amount of equity that can be released is determined by your age and the value of the property.

Once the loan is approved, you can access your money to use however you wish, and the lender charges interest on the amount you owe.

You don't have to make ongoing repayments with this type of product. Instead, the interest payments are added onto the loan balance each month.

How do I repay a reverse mortgage debt?

You repay your reverse mortgage debt when:

  • You decide to sell your home.
  • The last surviving borrower dies (if you take out the mortgage as a couple).
  • You move into an aged care facility.

How do I access the money?

The loan amount can be taken as one of the following, or a combination of the following:

  • A lump sum.
  • A regular monthly payment.
  • A line of credit.

How much of my equity can I borrow?

Most lenders let you borrow between 15% and 45% of a property's value. And the older you are, the more you can borrow.

The lender wants to make sure the equity in your property will be enough to cover the loan plus the interest.

For example, if your home is valued at $500,000, you're only able to access a maximum of $75,000. This ensures the value of your home will be enough to repay your loan in full, plus interest.

Some lenders have specific borrowing amounts depending on your age. Here's an example.

Age of BorrowerPercentage of Property Value Available

Use our reverse mortgage calculator to estimate how much you can borrow and what it will cost you

To use the calculator, enter the following details:

  • Your age. The older you are, the more equity you can borrow.
  • Your property's value. You can borrow a percentage of your property's value. You can estimate your home's current worth if you're not sure.
  • An estimate of your property's future value. The lender factors in the future growth of your property's value. You can choose high, medium, low or insert your own figure. Lenders usually go with 3%.
  • The interest rate. Add the interest for the reverse mortgage product you are interested in.
  • Payment options. You can get paid in a lump sum or a regular monthly payment.

Is there anything else I should know about these products?

Reverse mortgages are aimed at older people and affect the value of the biggest asset most people own: their family home. That's not to say that reverse mortgages are bad, but borrowers need to do their research and decide if this is the right choice for them.

It's worth keeping the following in mind when considering a reverse mortgage:

  • Higher interest. Interest charges on reverse mortgages are generally higher than typical home loans. An average variable rate on a reverse mortgage is (at the time of writing) around 6.25%- 7.25%, however this will vary from lender to lender. As the interest compounds, the loan amount can increase rapidly.
  • Fees. Setup costs for a reverse mortgage may vary between $1,500 - $2,000 depending on the lender. This typically covers the lender application fee, government charges, legal charges and any broker fees.
  • Pension eligibility. A reverse mortgage may affect your ability to qualify for the pension. Contact the Department of Human Services to find out how it could impact your eligibility to see if you can structure your reverse mortgage in a way that does not interfere with your pension benefit.
  • Break fees. If you fix the interest rate on your reverse mortgage, the charges to break the agreement can be costly.

To minimise the risk of paying too much interest, you should only borrow what you need. Carefully consider the current value of your house and the amount of equity you intend to borrow from it. Speak to a mortgage broker or financial planner to determine how much the interest charges will be in total.

Are there any alternatives to reverse mortgages?

If you want to access equity in your property, but you don't want to take out a reverse mortgage, the primary alternative is to sell or downsize your home. However, this will incur substantial costs such as stamp duty, agent and conveyancing fees so it's a good idea to weigh the benefits and risks involved.

Frequently asked questions (FAQ) about reverse mortgages

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    9 Responses

      Default Gravatar
      NeilAugust 8, 2019

      The reverse mortgage calculator is quite useful. However, I want to make a repayment each month or fortnight. Is there an enhanced version of the calculator that provides for repayments of interest at least, maybe more?

        Avatarfinder Customer Care
        JeniAugust 9, 2019Staff

        Hi Neil,

        Thank you for getting in touch with Finder.

        We appreciate your feedback on this page. I have forwarded your feedback to the team who’s on it and they’d look into this. Please note that when it comes to repayment and calculation of interest varies per lender.

        I hope this helps.

        Thank you and have a wonderful day!


      Default Gravatar
      johnNovember 13, 2017

      I am 73 years old my wife is 55 we own our house can we reverse mortgage 100,000 our house value 1,000,000

        Avatarfinder Customer Care
        JoanneNovember 13, 2017Staff

        Hi John,

        Thank you for visiting Finder.

        For this particular concern, it would be best that you reach out mortgage broker that way you will get expert advice and get specialized answers to your questions.


      Default Gravatar
      SharonSeptember 11, 2017

      My husband and I are considering a reverse mortgage for home renovations he is 69 and I’m 68 which lenders supply these loans and what fees and interest would we incur we own our home

        Avatarfinder Customer Care
        HaroldSeptember 11, 2017Staff

        Hi Sharon,

        Thank you for your inquiry.

        As per checking you are already in the correct page. Please use the table provided above to review and compare the available options for you.

        I hope this information has helped.


      Default Gravatar
      WansoonMarch 6, 2017

      Please send me regular newsletter of

        Avatarfinder Customer Care
        DeeMarch 7, 2017Staff

        Hi Wansoon,

        Thanks for reaching out.

        Please feel free to sign up to our newsletter to stay updated with our latest content.


      Avatarfinder Customer Care
      ShirleyMarch 12, 2015Staff

      Hi C Saum,

      Thanks for your question.

      Please note that is an Australian comparison and information service. We only compare products and give general information relevant to Australia.

      You’ll need to speak to the Secretary of Housing and Urban Development in the USA directly regarding this enquiry.


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