Reverse Mortgage Rates

Reverse Mortgage Rates Australia 2026

Looking for reverse mortgage interest rates in Australia?

Plus Equity helps Australian homeowners and retirees understand and compare reverse mortgage rates, comparison rates, fees and lender options before deciding whether home equity release is suitable for their circumstances.

Reverse mortgage interest rates can vary between lenders and products and may change over time. Because interest can be added to the outstanding loan balance rather than paid each month, understanding the rate and long-term cost of a reverse mortgage is particularly important.

Plus Equity can help you compare available reverse mortgage options from Australian lenders and understand how different rates, fees and loan structures could affect the amount you owe and the equity remaining in your home.

Compare Reverse Mortgage Rates & Options

What Are Current Reverse Mortgage Rates in Australia?

Reverse mortgage rates in Australia vary between lenders, products and loan structures. There is no single reverse mortgage interest rate that applies to every borrower.

The rate available to you may depend on the lender, product, loan structure and other eligibility requirements.

When comparing reverse mortgages, it is important to consider more than the advertised interest rate. You should also consider the comparison rate, establishment costs, ongoing or transaction fees, loan features, repayment flexibility and how interest may accumulate over time.

Plus Equity helps eligible Australian homeowners compare available reverse mortgage options based on their individual circumstances.

How Do Reverse Mortgage Interest Rates Work?

Reverse mortgage interest is generally charged on the outstanding loan balance.

Unlike a conventional home loan where borrowers commonly make regular principal and interest repayments, some reverse mortgages allow interest to be added to the loan balance instead.

This means you may be charged interest on both the amount originally borrowed and interest previously added to the loan.

This is known as compound interest.

As a result, your reverse mortgage balance can increase over time if repayments are not made.

Reverse Mortgage Compound Interest Explained

Compound interest is one of the most important costs to understand before taking out a reverse mortgage.

For example, if you borrow money and make no repayments, interest may be added to your outstanding balance. Future interest can then be calculated on the increased balance.

Over a long period, this can substantially increase the amount owed.

The actual outcome will depend on factors including:

Your starting loan balance
Your reverse mortgage interest rate
How long you hold the loan
Additional amounts you draw
Any repayments you make
Fees added to the loan
Changes to the interest rate

This is why comparing reverse mortgage rates is about more than finding the lowest advertised percentage. The long-term cost and effect on your remaining home equity should also be considered.

Why Are Reverse Mortgage Rates Different From Standard Home Loan Rates?

Reverse mortgages and standard owner-occupied home loans are structured differently.

With a conventional mortgage, borrowers generally make regular repayments throughout the loan term.

With many reverse mortgages, regular repayments may not be required and interest may instead accumulate on the outstanding balance.

Reverse mortgage pricing therefore reflects a different lending structure, borrower profile and repayment arrangement.

When comparing a reverse mortgage with a standard home loan, it is important to compare the overall structure and cost of the products, rather than simply comparing headline interest rates.

What Affects Your Reverse Mortgage Interest Rate?

The reverse mortgage rate available to you can depend on the lender and product you choose.

Factors to consider can include:

Lender

Different Australian reverse mortgage lenders may offer different interest rates, fees, features and lending criteria.

Loan Product

A provider may offer more than one home equity release or retirement lending product, each with its own pricing and repayment structure.

Variable or Other Rate Structures

The applicable interest rate structure can affect how the cost of your reverse mortgage changes over time.

Where a variable rate applies, the interest rate may increase or decrease during the life of the loan.

Repayment Structure

Some products may provide options for making voluntary repayments or, depending on the product, paying some or all interest as it falls due.

The structure selected can affect how quickly the outstanding balance grows.

Fees and Charges

The interest rate is not the only cost.

Depending on the lender and product, costs may include establishment, valuation, legal, government or other applicable charges.

Reverse Mortgage Interest Rate vs Comparison Rate

When comparing reverse mortgage products, you may see both an interest rate and a comparison rate.

The interest rate is the percentage used to calculate interest on the loan.

A comparison rate is designed to incorporate the interest rate and certain fees and charges into a single percentage to help consumers compare the cost of credit.

However, a comparison rate does not necessarily capture every cost or feature that could affect your individual loan.

For this reason, homeowners should consider the interest rate, comparison rate, fees, loan features and long-term projected cost when comparing reverse mortgages.

How Much Does a Reverse Mortgage Cost Over Time?

The long-term cost of a reverse mortgage depends heavily on the amount borrowed, interest rate, loan duration, future drawdowns, fees and repayments.

Because interest may compound, even a relatively small difference in the interest rate can become more significant over a longer period.

For example, the balance of a reverse mortgage held for five years may look very different from the balance of the same loan held for 15 or 20 years.

Before proceeding, it is important to understand:

How much you intend to borrow
The applicable interest rate
Whether the rate can change
How interest is calculated and added
What fees apply
Whether you intend to make repayments
How long you may hold the loan
How the loan could affect your remaining home equity

A reverse mortgage calculator can help illustrate how different assumptions may affect the loan balance and remaining equity over time.

Can Reverse Mortgage Rates Change?

Yes. Variable reverse mortgage interest rates can change over time.

If your interest rate increases, interest may accumulate more quickly on the outstanding balance. If the rate decreases, the cost of interest may reduce, all else being equal.

This is particularly important with a reverse mortgage because the loan may remain in place for many years.

Borrowers should understand whether their rate is variable, how rate changes are communicated and how an increase could affect the projected loan balance.

Do You Have to Pay Interest Each Month?

Not necessarily.

With many reverse mortgage structures, borrowers are not required to make regular monthly repayments. Instead, interest can be added to the outstanding loan balance.

Depending on the product, borrowers may be able to make voluntary repayments.

Making repayments can reduce the outstanding balance and may reduce the amount of interest that accumulates over time.

Product terms differ, so repayment options should be checked with the relevant lender.

How to Compare Reverse Mortgage Rates in Australia

The lowest reverse mortgage rate is not automatically the best reverse mortgage for every homeowner.

A proper comparison should consider:

Interest rate
Comparison rate
Establishment and application fees
Valuation and other applicable costs
Borrowing limits
Eligibility requirements
Property criteria
Drawdown options
Repayment flexibility
Loan features
How interest is calculated
Long-term effect on home equity

Plus Equity helps homeowners look beyond the headline rate and compare the broader features and costs of available reverse mortgage options.

Reverse Mortgage Rates for Pensioners and Retirees

Reverse mortgages are commonly considered by older Australian homeowners seeking to access some of the equity accumulated in their property.

There is not necessarily a separate reverse mortgage interest rate for pensioners simply because a borrower receives the Age Pension.

The rate and product available will depend on the relevant lender's product, eligibility requirements and lending criteria.

If you receive the Age Pension or another Centrelink payment, you should also consider how accessing and using home equity may interact with your individual financial circumstances.

Reverse Mortgage Rates vs the Home Equity Access Scheme

A reverse mortgage and the Australian Government's Home Equity Access Scheme (HEAS) are different ways eligible homeowners may access equity.

A reverse mortgage is a credit product provided by a lender and secured against your property.

The Home Equity Access Scheme is a government scheme administered through Services Australia and has its own eligibility rules, interest rate and payment arrangements.

The interest rates, borrowing limits, payment options and other conditions can therefore be very different.

Homeowners considering equity release should understand these differences rather than comparing the interest rates alone.

Is a Lower Reverse Mortgage Rate Always Better?

A lower interest rate can reduce the amount of interest charged, but rate should not be considered in isolation.

A product with a competitive rate may have different fees, borrowing limits, eligibility requirements or features from another product.

The most appropriate option will depend on your circumstances, objectives and the products for which you qualify.

The aim should be to understand the overall cost, flexibility and suitability of the reverse mortgage, not simply select the lowest advertised rate.

How Can Plus Equity Help Compare Reverse Mortgage Rates?

Plus Equity is a specialist reverse mortgage broker in Australia.

Rather than approaching only one provider, we help eligible homeowners understand and compare available reverse mortgage options based on their circumstances.

We can help you:

Compare available reverse mortgage interest rates
Understand comparison rates and fees
Compare Australian reverse mortgage lenders
Assess potential borrowing capacity
Understand different loan and drawdown structures
Consider how interest could affect your loan balance over time
Navigate the application process if you decide to proceed

Our aim is to make comparing reverse mortgages clearer and easier to understand.

Frequently Asked Questions About Reverse Mortgage Rates

What is the current reverse mortgage interest rate in Australia?

There is no single reverse mortgage rate in Australia. Interest rates vary between lenders and products and can change over time. Check current lender pricing and consider the comparison rate, fees, features and long-term cost before choosing a reverse mortgage.

Are reverse mortgage rates higher than normal mortgage rates?

Reverse mortgages are structured differently from conventional home loans and their rates may be higher than standard owner-occupied mortgage rates. Regular repayments may not be required, and interest may instead accumulate on the outstanding balance.

Is reverse mortgage interest fixed or variable?

This depends on the product. Many reverse mortgage products use variable interest rates, meaning the applicable rate can change over time. Always check the relevant lender's current product terms.

Is reverse mortgage interest compounded?

Where interest is added to the outstanding loan balance, future interest may be calculated on the original amount borrowed plus accumulated interest. This creates a compounding effect and can cause the balance to grow over time.

How often is reverse mortgage interest calculated?

The method and frequency used to calculate and charge interest depend on the lender and product. Check the relevant credit contract and product information to understand exactly how interest is calculated and added.

Can I make repayments to reduce reverse mortgage interest?

Depending on the product, voluntary repayments may be permitted. Reducing the outstanding balance can reduce the amount on which future interest is calculated. Check the lender's repayment terms before proceeding.

What other fees apply to a reverse mortgage?

Depending on the lender and product, costs can include establishment, valuation, legal, government and other applicable fees. Comparing the total cost of a reverse mortgage is therefore important rather than focusing only on the advertised rate.

How can I compare reverse mortgage rates?

Compare the interest rate, comparison rate, fees, loan features, borrowing limits, eligibility criteria and repayment flexibility of available products. Plus Equity can help eligible homeowners compare reverse mortgage options from Australian lenders.

Compare Reverse Mortgage Rates in Australia

Choosing a reverse mortgage is a long-term financial decision, and the interest rate can have a significant effect on how your loan balance changes over time.

Plus Equity helps Australian homeowners compare reverse mortgage rates, lenders, fees and home equity release options so they can better understand the choices available to them.

Based in Bondi Junction, Sydney, Plus Equity assists eligible homeowners across NSW and Australia-wide.

If you're researching current reverse mortgage rates in Australia, speak with Plus Equity to compare available options and understand the potential long-term cost.

Compare Reverse Mortgage Rates With Plus Equity

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