After decades of paying off your home, it may now be one of your biggest assets. A reverse mortgage lets you access some of the equity you have built up as cash, giving you more financial freedom in retirement. You could use it for home improvements, unexpected expenses, helping family or simply living more comfortably, all without having to sell your home or move out.
What is a reverse mortgage?
A reverse mortgage is a loan for homeowners aged 60 and over that lets you access some of the equity in your home as cash, without having to sell or move out. Equity is the difference between what your property is worth and what you still owe on it.
Unlike a regular home loan, you generally do not need to make regular repayments. This can make a reverse mortgage useful for homeowners who have built up significant wealth in their property but want more money available in retirement. The funds can be used for things like renovations, healthcare and living expenses, helping family, travel, or simply having more financial flexibility.
The trade-off is that interest is added to the loan balance over time. If you do not make repayments, that interest compounds, so the amount you owe grows and the equity remaining in your home reduces. The loan is typically repaid when you sell your home, move permanently into aged care, or pass away.
That does not make a reverse mortgage inherently good or bad. For some homeowners, it can solve a very real problem: having significant wealth tied up in their home, but not enough accessible cash to live the retirement they want. A reverse mortgage provides a way to use some of that wealth while continuing to live in the home.
That extra cash can make a meaningful difference. It might allow someone to renovate their home so they can stay there longer, pay for travel or a new car, cover healthcare and other larger expenses, help their children or grandchildren, or simply have more breathing room in their day-to-day budget. And because regular repayments generally are not required, accessing that equity does not necessarily create another monthly expense.
The question, then, is not simply whether reducing your home equity is a bad thing. It is whether having access to some of that equity now is more valuable to you than preserving all of it for later. For some people, particularly those with substantial equity who want to remain in their home, that can be a worthwhile trade-off.
Australia’s reverse mortgage market held roughly $5.5 billion in outstanding balances as at 30 June 2025, according to Deloitte’s 2026 Australian Reverse Mortgage Survey, compared with an estimated $3 trillion in housing wealth held by Australians aged 60 and over. Despite the enormous amount of wealth tied up in Australian homes, reverse mortgages remain a relatively small part of the retirement landscape.
Who is eligible for a reverse mortgage?
Eligibility comes down to five things: your age, your ownership, whether the home is in your country of residence and if you live in it. Most lenders require the youngest borrower on the loan to be at least 60. If you own your home with a partner, the younger age is the one that counts.
The criteria:
- You are 60 or older. Where there are two borrowers, the youngest one sets the limit. A 72-year-old borrowing with a 61-year-old partner is assessed on 61.
- You own your home, or hold significant equity in it. A remaining home loan does not automatically rule you out. In many cases it can be paid out from the reverse mortgage itself, though that reduces what is left over for you.
- The property is your primary residence. Holiday homes and investment properties are generally not eligible. If you are looking at equity release on an investment, that is a different conversation, and our guide on using home equity to buy an investment property is a better starting point.
- You are an Australian citizen or permanent resident.
- The property is in Australia. Location and property type still matter to individual lenders. Rural acreage, retirement village units, and some apartment types are assessed differently.
Meeting all five does not mean the loan will be approved. Lenders still assess the property, your circumstances, and whether the loan is suitable for you.
How much can you borrow at your age?
The amount available scales with the age of the youngest borrower. The older you are, the higher the percentage of your property’s value a lender will release, because the expected life of the loan is shorter. These are indicative figures only, and your actual limit is set by the lender.
Age of youngest borrower | Indicative maximum |
60 | Up to 15% of property value |
65 | Up to 20% |
70 | Up to 25% |
75 | Up to 30% |
80 | Up to 35% |
85 | Up to 40% |
On an $850,000 home with a youngest borrower aged 70, that puts roughly $212,500 within reach. Your actual limit depends on the lender, the property type, and your circumstances. ASIC’s Moneysmart provides a free reverse mortgage calculator that projects how a balance grows over time, and it is worth running before you talk to anyone.
What protections apply?
Australian reverse mortgages carry protections written into law rather than left to lender policy. Three matter most.
You keep ownership. A reverse mortgage does not transfer title. You remain the owner for as long as you live there.
Negative equity protection. For any reverse mortgage entered into on or after 18 September 2012, the National Credit Code prevents a lender from requiring repayment of more than the market value of the property. You cannot owe more than the home is worth, and the shortfall cannot be pursued against your estate or your family.
Independent legal advice is required. You cannot enter a reverse mortgage contract without it. That is a protection for you, not a formality, and it exists partly because ASIC’s review of reverse mortgage lending found borrowers frequently did not understand the long term cost of the loans they had signed.
How Borro fits in
Borro™ is not the lender, and we do not write reverse mortgages. What we do is work out whether the product is worth exploring in your situation, and if it is, introduce you to specialists who handle it properly.
- A free chat with our team. We confirm the basics against the criteria above. No paperwork.
- An introduction. If a reverse mortgage looks like a fit, we connect you with our partners at Connective Reverse, who are specialist reverse mortgage advisers.
- The full picture. They walk you through your borrowing limit, the costs, and what the loan means for your estate. Independent legal advice happens here.
- You decide. No pressure, no rush.
Sometimes the answer is that a reverse mortgage is not the right tool, and something like refinancing your existing loan suits you better. We would rather tell you that early.
If you are weighing this up, or looking into it on behalf of a parent, book a free chat, and we will talk you through where you stand. You can also read more on our reverse mortgage service page, or run the numbers first in our Calculator Hub.
Frequently Asked Questions
Possibly. An existing home loan does not automatically disqualify you, and in many cases the remaining balance can be paid out using the reverse mortgage. The trade-off is that doing so uses up part of your available limit, leaving less for other purposes. A specialist adviser will model both scenarios for you.
Sixty. Where there are two borrowers, the youngest person’s age determines eligibility and sets the borrowing limit. A couple aged 74 and 62 would be assessed on the 62-year-old, which means a lower percentage of the property value is available than the older partner’s age alone would suggest.
No regular repayments are required while you live in the home. Interest compounds and is settled when the loan ends. Most lenders do allow voluntary repayments if you want to slow the growth of the balance, and doing so can preserve more equity for your estate.
It can. Money drawn from a reverse mortgage may be assessed under Centrelink’s income and assets tests depending on how you hold and use it, and it can also affect aged care fee calculations. This needs to be checked against your own circumstances before you proceed, not after.
There is no legal requirement to tell anyone. That said, the loan is repaid from your home when it is sold, which affects what your estate passes on. Most advisers encourage a family conversation early, so the arrangement is understood rather than discovered.
This article is general information only and does not constitute financial advice. Your personal circumstances may differ. Talk to your broker about your specific situation.
Sources: Deloitte 2026 Australian Reverse Mortgage survey; ASIC Moneysmart; National Credit Code (Consumer Credit Legislation Amendment (Enhancements) Act 2012); ASIC review of reverse mortgage lending.
