Being upfront about costs and risks

A reverse mortgage is a significant financial decision. You deserve a completely transparent picture of both the costs involved and the risks to consider - before making any commitment. Nothing here should surprise you at settlement.

Upfront costs

  • Application fee: Varies by lender, typically $0 to $995. Some lenders waive this entirely.
  • Property valuation: Required by the lender, typically $300 to $600.
  • Independent legal advice: A legal requirement before signing. Solicitor fees typically $500 to $1,500.
  • Settlement fee: A small establishment fee, typically $100 to $300.

There is no cost to you for our broker service. We are paid a commission by the lender at settlement, disclosed clearly in our Credit Guide before any recommendation is made.

Ongoing costs

  • Interest: The primary ongoing cost. Because no repayments are required, interest compounds and is added to the loan balance each year. The balance grows over time.
  • Annual loan fee: Some lenders charge a small annual fee, typically $0 to $120.
  • Building insurance: You must maintain current building insurance for the life of the loan.

The compounding interest risk

Because no repayments are made, interest is added to the balance each year and then accrues on that higher balance. As an illustrative example, a $100,000 loan at 8% per annum would grow to approximately:

  • $117,000 after 2 years
  • $149,000 after 5 years
  • $222,000 after 10 years
  • $493,000 after 20 years

This is why the No Negative Equity Guarantee exists - you can never owe more than the property is worth. But these figures also illustrate why reverse mortgages suit people with a specific need for funds now, rather than as a long-term wealth strategy. We model these projections for every client so you can see the full picture. Read more on our No Negative Equity Guarantee page.

Impact on the Age Pension

Drawing funds from your home equity may affect your Age Pension eligibility or payment rate. Lump sum payments are generally assessed under the assets test, while income stream arrangements may be treated differently. The rules are complex - we strongly recommend speaking with Services Australia and a licensed financial adviser before proceeding.

Impact on your estate

A reverse mortgage reduces the equity remaining in your home over time, meaning less available for your estate and beneficiaries. We encourage clients to discuss this openly with their family before proceeding and actively support that conversation.

What we will not do

  • We will not guarantee approval - eligibility is subject to lender assessment
  • We will not advise whether a reverse mortgage suits your overall retirement strategy - that requires a licensed financial adviser
  • We will not recommend proceeding if we do not believe it genuinely serves your interests

Important: Figures above are illustrative only. Actual rates, fees and balances vary. This is general information only and does not constitute personal financial advice. Money at 60 is a credit representative (CR 557838) of Invictus Group Pty Ltd (ACL 483078). Seek independent financial and legal advice before proceeding.