Unlock Your Home's Equity

A reverse mortgage in Australia allows eligible older homeowners to borrow money using the equity in their home as security while continuing to live in the property. Unlike a standard home loan, regular repayments are generally not required while you continue living in the home. Instead, interest is added to the loan balance and compounds over time.Depending on the lender and your circumstances, reverse mortgage funds may be available as a lump sum, regular payments, a line of credit, or a combination of these options. The loan is generally repaid when the property is sold, you permanently move out, or from your estate after death.Plus Equity helps Australian homeowners understand and compare reverse mortgage options, borrowing limits and lender requirements.

The amount you can borrow with a reverse mortgage in Australia generally depends on your age, property value, existing debt and the lending criteria of the reverse mortgage provider. Typically, the older you are, the greater the percentage of your home's value you may be able to access.ASIC's MoneySmart says that, as a general guide, a 60-year-old may be able to borrow around 15–20% of their home's value, with the potential borrowing percentage increasing by roughly 1% for each year above 60. Actual reverse mortgage borrowing limits vary between lenders and products.A reverse mortgage broker can assess your circumstances and help determine how much equity you may be able to release from your home.

Reverse mortgage interest rates in Australia vary between lenders and can change over time. Reverse mortgage rates are generally higher than standard residential home loan rates, so it is important to compare the interest rate, comparison rate, fees, loan features and total long-term cost rather than looking at the advertised rate alone.Because interest is generally added to the reverse mortgage balance and compounds over time, even a small difference in interest rates can have a significant effect on the amount owed and the home equity remaining in later years.Plus Equity can help homeowners compare reverse mortgage lenders, rates and available options in Australia based on their individual circumstances.

Reverse mortgage eligibility in Australia depends on the lender, but these products are generally designed for older Australians who own their home and have sufficient equity available.ASIC's MoneySmart notes that most lenders do not offer reverse mortgages to people under 60 years of age, although individual lender eligibility requirements can differ. Your age, property value, property location, existing mortgage balance and lender criteria can all affect whether you qualify and how much you can borrow.For couples, lenders may also base borrowing limits on the younger applicant's age. Plus Equity can help determine which reverse mortgage options may be available based on your age, property and circumstances.

A reverse mortgage can potentially affect your Age Pension or other Centrelink benefits, depending on how the money is received, held and used. The impact will depend on your individual circumstances and how Centrelink's income and assets tests apply to you.ASIC's MoneySmart recommends discussing the potential impact with Centrelink before taking out a reverse mortgage and notifying Centrelink if you proceed. Older Australians should also consider how a reverse mortgage compares with alternatives such as the Australian Government's Home Equity Access Scheme (HEAS).For personalised information about your Age Pension or government benefits, you should confirm your position directly with Services Australia or seek appropriate professional advice.