Reverse mortgage FAQs
We understand that considering a reverse mortgage is a significant decision. Below you will find clear, honest answers to the questions we hear most often.
If you cannot find what you are looking for, or would prefer to talk it through with someone, we are here to help.
Understanding reverse mortgages
The basics of how reverse mortgages work in Australia.
A reverse mortgage lets you access some of the equity in your home as cash, without having to sell or move out.
It is a loan secured against your home. Unlike a regular mortgage, you do not need to make any repayments while you live in the property. The loan (plus interest) is repaid when you sell, move into permanent aged care, or pass away. You remain the legal owner of your home throughout.
Yes. You remain the registered owner of your home for the life of the loan.
The lender places a mortgage on the title as security, just like a standard home loan. But ownership stays with you. You continue to live in the home, maintain it, and benefit from any increase in property value over time.
No regular repayments are required.
Interest is added to your loan balance each month instead. This means your total debt grows over time. However, most products allow you to make voluntary repayments if you choose. Even small regular payments can help slow the growth of your balance.
Our Costs and Risks page explains how compound interest works
You generally need to be at least 55 years old.
If two people are applying together, the age of the youngest person is used. Some lenders may have a higher minimum age for certain products. In general, the older you are, the more you may be able to borrow, because the loan is expected to run for a shorter period.
It depends on your age and the value of your property. Typical borrowing limits range from around 15% to 45% of your home's value.
The amount you can access is determined by a Loan to Value Ratio (LVR) which increases with age. A 60 year old may access around 15 to 20% of their property value, while someone aged 80 or older may access up to 45%. The exact amount also depends on the lender, the property type and location, and any existing mortgage.
Try our free calculator to see an estimate for your situation
There are generally no restrictions on how you use the funds from a reverse mortgage.
Common uses include home renovations and modifications, covering day to day living expenses, paying for medical or dental costs, helping family members, funding travel, clearing existing debts, or supplementing retirement income. How you use the funds may affect your Age Pension entitlements, so it is worth understanding this before you decide.
The loan becomes repayable when you permanently leave the home.
This typically happens when you sell the property, move into permanent residential aged care, or pass away. At that point the property is usually sold, the loan is repaid from the proceeds, and any remaining equity goes to you or your estate. The estate usually has 6 to 12 months to arrange repayment.
Our For Families page explains what this means for your family
Yes, provided your partner is named as a co-borrower on the loan.
If both of you are listed on the loan, the surviving partner continues to live in the home under the same terms. The loan does not become repayable until both borrowers have permanently vacated the property. If only one person is named on the loan, it may become due when that person passes away, so it is important to ensure both names are included at the outset.
Eligibility and property requirements
What you need to qualify and which properties are accepted.
You generally need to be at least 55, own a residential property, and live in it as your primary home.
The property needs to be in your name (or you and your partner's names) and meet the lender's valuation and location criteria. You can still have a small remaining mortgage, which can usually be paid off as part of the reverse mortgage. There is no income test, and your credit history is less significant than with a standard home loan.
Yes, in many cases.
If you have a small remaining mortgage, the reverse mortgage can be used to pay it off first. Whatever is left over is then available for you to use. Your specialist will help you understand whether this makes sense for your particular situation and how much would be available after the existing mortgage is cleared.
Much less than with a standard home loan.
Because no regular repayments are required, your income is not a major factor. Lenders may still review your financial position as part of their responsible lending obligations, but the focus is primarily on your age and property value. A poor credit history does not automatically disqualify you.
Most standard residential properties are accepted, including houses, townhouses, villas, and some apartments.
Rural properties, hobby farms, retirement village units, and very small apartments may face restrictions depending on the lender. Properties in certain postcodes may also require individual assessment. Our team can quickly tell you whether your property type and location are likely to be accepted.
No. It is a general guidance tool only.
Our online eligibility check does not collect personal data and is not a formal application or pre-approval. It gives you an indication based on general criteria. If you decide to move forward, a detailed assessment will be conducted by the lender, including a full property valuation.
Costs, interest and fees
What it costs, how interest works, and what you will pay.
Interest rates vary by lender and product. Rates are typically higher than standard home loan rates.
We compare rates across our lender panel to find the most suitable option for your situation. Rates can change, so we always provide you with current figures during a consultation. Because no repayments are made, the interest compounds over the life of the loan, which means the total amount owed can grow significantly over time.
Because you do not make regular repayments, interest is added to your loan balance each month, and you then pay interest on that growing balance.
This is called compound interest. It means your loan balance grows over time, slowly at first, then more quickly as the years pass. This is why it is important to understand the long term projections before making a decision.
Try our calculator to see projected balance growth for your situation
Fees vary by lender but typically include application fees, valuation fees, and sometimes ongoing service fees.
All fees will be disclosed to you clearly before you make any decision. There are no hidden fees. In most cases, the upfront fees can be added to the loan rather than paid out of pocket. We provide a full cost breakdown as part of our comparison service so you can see exactly what each option will cost.
Yes. Most reverse mortgages allow voluntary repayments without penalty, up to a certain limit each year.
While you are not required to make any repayments, you have the option to pay down some or all of the interest as it accrues. Some borrowers choose to make regular small payments to slow the growth of their balance. Even modest payments can make a meaningful difference over the life of the loan.
No. Our service is free to you.
If you proceed with a reverse mortgage through us, we receive a commission from the lender. This commission does not affect your interest rate or the terms of your loan. We disclose all commission arrangements to you in writing before you make any decision. You are never under any obligation to proceed.
Our Credit Guide has full details of our commission arrangements
Protections and safeguards
How you are protected under Australian law.
No. Australian law protects you with a No Negative Equity Guarantee.
Under the National Consumer Credit Protection Act, all regulated reverse mortgages issued after 18 September 2012 must include this guarantee. It means you (or your estate) will never owe more than the market value of your home at the time it is sold, regardless of how much interest has accumulated. If the loan balance exceeds the property value, the lender absorbs the difference.
Our Your Protections page has more detail on the safeguards that apply
No. You have a guaranteed right to stay in your home for as long as you live there.
All reverse mortgages on our panel include a Guaranteed Occupancy right. This is a legal protection that prevents the lender from forcing a sale or evicting you while the property remains your principal residence. This protection applies even if the value of the loan exceeds the value of the home.
Yes. You can cancel the contract within the cooling-off period without penalty.
Under Australian law, you have a cooling-off period after signing a reverse mortgage contract. The exact duration depends on the lender and product but is typically around 14 days. During this time you can withdraw from the contract without any cost. After the cooling-off period, you can still repay and close the loan at any time, although early exit fees may apply.
Yes. Before a reverse mortgage can settle, you must obtain independent legal advice from a solicitor.
This is a legal requirement designed to protect you. A solicitor will explain the contract terms, your rights, and the implications of the loan. This is an important safeguard, and we encourage you to take it seriously. You choose your own solicitor, and some lenders may contribute to the cost.
Age Pension and government benefits
How a reverse mortgage may interact with your entitlements.
It may, depending on how you use the funds.
Your home is generally exempt from the pension assets test while you live in it, and this does not change with a reverse mortgage. However, if you receive a lump sum and hold the funds in a bank account or investments, those funds may be counted under the Centrelink assets and income tests. Funds used to pay off debt, renovate your home, or cover immediate expenses may be treated differently. The rules are complex and depend on your individual circumstances.
We strongly recommend contacting Services Australia or speaking with a qualified financial adviser before proceeding.
No. Reverse mortgage proceeds are a loan, not income, so they are not assessed as income.
However, where you hold the funds may affect your Centrelink assessment. Money sitting in a bank account may be counted as an asset and may be subject to deeming under the income test. The rules depend on how and when the funds are used. This is a complex area and the impact varies from person to person.
We recommend checking with Services Australia or seeking independent financial advice for guidance specific to your situation.
It could, depending on your circumstances and how the funds are used.
The Commonwealth Seniors Health Card has its own eligibility criteria based on income thresholds. Funds from a reverse mortgage that are held in savings or investments may affect your assessed income through deeming provisions. The exact impact depends on your full financial picture.
It is best to check with Services Australia before making a decision. A qualified financial adviser can help you understand the potential impact on your specific entitlements.
Family, estate and inheritance
What a reverse mortgage means for your family and your estate.
Your family inherits the remaining equity after the loan is repaid from the sale of your home.
When the property is sold, the loan (including accumulated interest) is repaid first. Whatever is left over goes to your estate and is distributed according to your will. The No Negative Equity Guarantee means your estate will never owe more than the property is worth. It is worth noting that because interest compounds over time, the remaining equity may be less than you expect. Our calculator can help you understand projected outcomes.
Absolutely. We actively encourage it.
Family members are welcome to join any phone call, video meeting, or discussion. Many families find it helpful to have another person present to listen, ask questions, and support the decision. There is no extra charge and it does not change the process. We want everyone who is affected to feel informed and comfortable.
Visit our For Families page for information specifically for adult children and family members
Their concerns are valid and we welcome them.
We are not here to convince anyone. If after understanding the details you or your family decide a reverse mortgage is not the right option, that is a perfectly good outcome. Our role is to provide clear, honest information so the right decision can be made, whatever that decision may be. There is no pressure at any stage.
The loan becomes repayable, and the estate typically has 6 to 12 months to arrange repayment.
Repayment is usually made through the sale of the property. The estate keeps any remaining equity after the loan is repaid. Thanks to the No Negative Equity Guarantee, the estate will never owe more than the property is worth at the time of sale. The family also has the option to repay the loan from other funds if they wish to keep the property.
Yes. The loan can be repaid from other funds if the family prefers to retain the property.
The lender does not require the property to be sold. They only require the loan to be repaid. If the family has other means to cover the outstanding balance, they are free to do so. This is entirely the family's decision.
The process and what to expect
How it works from first conversation to settlement.
From initial enquiry to settlement, it typically takes 4 to 8 weeks.
The timeline depends on several factors, including the lender's processing times, how quickly the property valuation is completed, and the time needed for independent legal advice. We manage the process on your behalf and keep you updated at every stage. There is no need to rush, and you can take as much time as you need at each step.
Our How It Works page walks you through each stage of the process
The process typically involves an initial conversation, comparison of options, application, property valuation, legal advice, and settlement.
You start with a free, no-obligation conversation with one of our specialists to understand your options. If you wish to proceed, we compare products across our lender panel and recommend suitable options. Once you choose a product, the lender conducts a formal assessment including a property valuation. You then receive a contract, obtain independent legal advice, and if everything is in order, the loan settles and funds are released.
No. There is absolutely no obligation at any stage.
Our initial consultation is a free, educational conversation. It is designed to help you understand your options and decide whether a reverse mortgage might be suitable. You are welcome to take the information away, discuss it with your family, and come back to us if and when you are ready. Many people have several conversations before deciding.
You can usually choose a lump sum, a line of credit, regular payments, or a combination.
A lump sum gives you all the funds at once. A line of credit lets you draw down funds as needed, and you only pay interest on what you have used. Some products offer regular scheduled payments. The right option depends on your needs and goals. Your specialist will help you choose the structure that works best for your situation.
About Money at 60
Who we are, how we work, and how we are paid.
No. We are an independent credit assistance provider. We are a broker, not a lender.
Money at 60 operates as a credit representative (CR 557838) of Invictus Group Pty Ltd (Australian Credit Licence 483078). We compare products from multiple lenders on our panel and help you find the option that best suits your circumstances. We are legally required to act in your best interests.
Our current lender panel includes Heartland Finance, Household Capital, and Brighten.
All are established Australian lenders with experience in retirement lending. We regularly review our panel to ensure we are offering competitive and suitable options. As an independent broker, we are not tied to any single lender.
Visit our Compare Lenders page to learn more about each lender
We receive a commission from the lender when a loan settles. Our service is free to you.
You never pay us a fee. If you proceed with a reverse mortgage through us, the lender pays us a commission. This commission does not affect your interest rate or loan terms. We disclose all commission arrangements in writing in our Credit Guide before we make any recommendation.
Money at 60 is part of the Starts at 60 group, Australia's largest online community for people over 60.
This connection gives us a deep understanding of the needs, concerns, and priorities of older Australians. However, our operating licences and regulatory obligations are entirely separate. Money at 60 operates independently under its own compliance framework.
As an independent broker, we compare multiple products to find what suits you, rather than offering just one lender's products.
When you go directly to a lender, you only see what that lender offers. We compare options across our panel and are legally required to act in your best interests. We also manage the entire process for you and provide ongoing support. Our service costs you nothing, so there is no financial advantage in going direct.
Alternatives and considerations
Other options worth exploring alongside a reverse mortgage.
Yes, and we encourage you to consider all your options before making a decision.
Alternatives may include downsizing to a smaller home, accessing the government's Home Equity Access Scheme (formerly Pension Loans Scheme), speaking with a financial adviser about your superannuation or other assets, or exploring support from family. A reverse mortgage is just one option, and it is not right for everyone. We can help you think through the alternatives as part of our education process.
It is a government scheme that allows eligible older Australians to access equity in their home as regular payments, using their property as security.
Formerly known as the Pension Loans Scheme, the Home Equity Access Scheme is administered by Services Australia. It operates differently from a commercial reverse mortgage and has its own eligibility criteria, interest rates, and conditions. It may be suitable for some people as an alternative or complement to a reverse mortgage.
We recommend contacting Services Australia directly for detailed information about this scheme.
Yes, some people use reverse mortgage funds to cover aged care costs such as the Refundable Accommodation Deposit (RAD).
The RAD is often a significant expense when entering residential aged care. A reverse mortgage can be one way to fund this while allowing you to retain ownership of your home. However, this is a complex area involving financial, legal, and personal considerations. The pension and assets test implications can also be significant.
We recommend seeking specialist aged care financial advice for guidance on this option.
Still have questions? We are here to help.
Every question is a good question. Our team will explain everything in plain English, with no pressure and no obligation.
Or call us: 1300 000 060