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It’s a truth universally acknowledged that a retiree with a home but little in the way of super or other assets could do with some extra income.
Around 66% of Australian retirees owned their home outright in 2023, with an average value of about $1.14 million. A further 13% or so still had a mortgage on their home, with an average value of around $873,000.
While super balances are increasing, they are still far less than the amount of wealth tied up in the family home. Average balances were $510,000 for retirees who owned their home outright and $409,600 for those with a mortgage. A tidy sum, but it may not fund the lifestyle you hoped for over 25-plus years many of today’s retirees can expect to live.
The Age Pension is a safety net, but it doesn’t stretch far. Finding extra cash for unexpected medical costs, aged care, mortgage debt or a desire to help the kids may be out of reach for many.
So it’s not surprising that there’s growing interest from the government and the private sector in finding ways to help retirees unlock the wealth in their home.
The Home Equity Access Scheme (HEAS)
To encourage participation, the government enhanced its Home Equity Access Scheme (HEAS) in July 2022 to allow lump sum payments as well as regular fortnightly income. It also added a no negative equity guarantee (NNEG) to ensure the borrower, or their family, can never owe more than the market value of their property when it’s sold.
The private reverse mortgage sector is also expanding, with new products and new entrants into the market tapping into different areas of need.
So how are retirees using HEAS and reverse mortgages more generally, and what are the trends?
How to get the most from HEAS
Despite relatively high levels of home ownership among Australian retirees, take-up of HEAS is still relatively low, although growing rapidly.
Following the changes in July 2022 allowing lump sum payments and the introduction of a no negative equity guarantee, take-up has more than trebled from 6,041 participants in June 2022 to 19,946 in March 2026. Around 72% of participants are on a full Age Pension, 22% are part-pensioners and just 5% are fully self-funded retirees who are more likely to use commercial reverse mortgages.
The average HEAS loan amount was $36,875 in March 2026 while the total amount of money drawn stood at $716 million, up from just $138 million in June 2022.
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Find out moreA study by the ARC Centre of Excellence in Population Ageing Research (CEPAR) at UNSW looked at who is using HEAS and how. It found 91% of HEAS users opt to receive the maximum amount they are eligible for.
To find out if this is the best use of the scheme, the study modelled four different strategies using 20 different household types, including couples and singles aged 67 who are eligible for the Age Pension and HEAS, with and without children, with income from housing, super and other assets, and five different wealth levels.
The strategies were:
- ASFA standard: Use HEAS so combined income from super, other assets, the Age Pension and HEAS reaches the Association of Superannuation Funds of Australia (ASFA) comfortable lifestyle budget for the household type
- 70% replacement: Use HEAS so the combined income from super, other assets, the Age Pension and HEAS reaches a 70% pre-retirement income replacement rate
- Maximum payment: Receiving the maximum amount from HEAS annually
- Lump sums + ASFA: Use lump sum payments to cover aged care expenditures plus fortnightly payments to support an ASFA-comfortable lifestyle.
One of the study’s authors, Dr Katja Hanewald, Associate Professor in the School of Risk and Actuarial Studies at UNSW Sydney, said results were measured not just on financial outcomes but the value people place on having extra cash now rather than in future, living in their own home and giving to their children.
The study found most households are better off receiving the maximum payments. The ASFA standard strategy provided the highest gains for lower-income households and women, while the 70% replacement strategy benefited wealthier households.
The following case studies illustrate some of the ways retirees are using HEAS.
Access to lump sum payments
While commercial reverse mortgage providers have long offered lump sums as well as regular income payments, HEAS borrowers have only been able to receive lump sum advances since July 2022. The maximum advance (which may be taken in one or two bites) is capped at 50% of the maximum annual rate of Age Pension. Currently that is up to $23,535 for couples and $15,611 for singles.
People may choose to use the lump sum for a variety of reasons – from maintaining the home or replacing the car to repaying credit cards, large bills, health and aged care costs.
While the relatively modest sums available via HEAS attract Age Pensioners on lower incomes, self-funded retirees may be more attracted to the flexibility and larger potential payments offered by commercial reverse mortgages, albeit at higher rates of interest. The current interest rate for a government-backed HEAS loan is 3.95%, compared with around 8% or more for commercial reverse mortgages.
Growing demand for reverse mortgages
Commercial reverse mortgages in Australia come in various forms and names, including home equity release and home reversion. Since a regulatory shake-up in 2012, consumer protections have been enhanced, including no negative equity guarantees.
As cost-of-living pressures squeeze retiree budgets, demand for alternative sources of income is likely to increase.
A 2026 survey by Deloitte found the average commercial reverse mortgage in the 12 months to June 2025 was $150,000, well above the maximum amounts available under HEAS. They are also available to younger retirees; the minimum age is generally 60 but may be as low as 55, compared with a minimum age of 67 for the HEAS.
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Find out moreAs you can see from the graph below, reverse mortgage users are using their funds for similar purposes to HEAS borrowers, with home improvement, debt repayment and car replacement the most popular. Travel also rates highly, especially for younger retirees in their 60s.
In practice, customers may use a reverse mortgage for one or several of these reasons rather than deplete their super.
As baby boomers progress through retirement, funding aged care will become a priority for many. Dr Hanewald says a reverse mortgage could be a good solution where one member of a couple goes into residential aged care while the other remains at home, so selling the home to pay an accommodation deposit is not an option.
A reverse mortgage may also be used to pay for home care services, to modify the home to make it easier to live in, or to pay someone to do the gardening.
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