Reverse mortgage rates in Australia

Compare current reverse mortgage rates in Australia, how compound interest grows the balance, and the fees that shape total cost. Private lenders sit at 8.5% to 9.3%, the government HEAS at 3.95%. All variable.

From 3.95% (HEAS)Up to 9.3% (private)Commission paid by the lender

Older Australian couple at home weighing up reverse mortgage rates and fees

We compare your rates with 50+ lenders

Where reverse mortgage rates sit today

These are the private reverse mortgage rates available in Australia as of July 2025. The five active private lenders advertise variable rates between 8.5% and 9.3% per annum. The government's Home Equity Access Scheme sits separately at 3.95% per annum.

Every reverse mortgage rate in Australia is variable. The rate today is not the rate for the life of the loan.

The private market range

8.5% to 9.3% p.a.

Heartland, Household Capital, Gateway Bank, IMB Bank, and P&N Bank make up the active private reverse mortgage market in Australia. Their advertised variable rates currently sit in this band, depending on the lender, the drawdown structure, and the property.

Why these rates sit above home loans

Structural, not opportunistic

A reverse mortgage lender receives no repayments for an unknown period, sometimes decades. The rate reflects the cost of an open-ended commitment, not a margin grab. Standard variable home loan rates sit closer to 6% to 7% for a reason: regular repayments shorten the lender's exposure. For a side-by-side of every active lender, see our reverse mortgage lender comparison.

All rates are variable

Subject to change

Lenders adjust pricing periodically. Reverse mortgage rates do not track the RBA cash rate as directly as standard variable home loans, but the broader rate environment shapes lender pricing over time.

The compounding question

How compound interest grows your reverse mortgage balance

The main concern for most borrowers is how quickly interest compounds. Here is what happens, in exact numbers. At 9.0% per annum on a $100,000 loan with no repayments, against a property worth $750,000 growing 3% per year:

Year 0
$650,000 in equity
$100,000 borrowed against $750,000 of property value. Equity stands at $650,000 from day one — the gap between what you owe and what the home is worth.
Year 10
$771,490 in equity
Loan balance has compounded to roughly $236,700. Property value has grown to roughly $1.0M at 3% per year. Equity is now $771,490 — higher than at the start, despite ten years of compounding interest.
Year 20
$794,961 in equity
Loan balance is roughly $560,400. Property value is roughly $1.36M. Equity holds at $794,961 — still above the original $650,000 after two decades of compounding interest, because the property value has grown faster than the debt.

Your property value, loan amount, and rate will differ. Use ASIC's Moneysmart reverse mortgage calculator or the Stryve calculator to model your own scenario.

A guarantee, by law

You can never owe more than your home is worth.

Three scenarios that worry borrowers, and how the no-negative-equity guarantee handles each one.

If the loan exceeds the sale price
The lender absorbs the difference. Not you. Not your estate. There is no second mortgage to chase and no shortfall to repay.
If property values fall
The guarantee is assessed at the time of sale, not at signing. A market drop years later cannot break it, and your home is still your home in the meantime.
If you pass it on
Your estate or family never inherits a debt larger than the home's sale price. The protection applies for the life of the loan, no matter who is on title.

Mandated by the National Consumer Credit Protection Act 2009 (Cth) for all reverse mortgages entered into after 18 September 2012. Moneysmart (ASIC) confirms borrowers can never owe more than the market value of the property at the time of sale.

When the HEAS rate of 3.95% changes the math

HEAS charges 3.95% per annum as of July 2025, well below private lenders. The catch is structural, not commercial: HEAS pays fortnightly amounts only, with no lump sum option, and is capped at 150% of the maximum Age Pension rate.

If you are pension-age and want both ongoing income and a lump sum, splitting between HEAS and a private lender can sit lower in total interest than either pathway alone.

When HEAS fits

Income top-up

You want to supplement fortnightly income, you receive a part pension and need to top it up, or your need is ongoing and predictable. HEAS at 3.95% is the cheapest reverse mortgage in Australia, but only for fortnightly payments. Read the full breakdown on the Home Equity Access Scheme page.

When a private reverse mortgage fits

Lump sum + flexibility

You need a lump sum for home modifications, medical costs, or aged care. You want to clear an existing debt in full. You need a line of credit for staged needs. Rates between 8.5% and 9.3% are higher, but they buy structure HEAS does not provide.

Splitting between both

Hybrid approach

Some borrowers run HEAS at 3.95% for ongoing income and a smaller private reverse mortgage for a one-off lump sum. The interest savings on the income component, year after year, can be substantial over a 15- or 20-year horizon.

Want help deciding between HEAS and a private loan?

Stryve compares both pathways in a single consultation, including split strategies if you need ongoing income and a lump sum.

Book a strategy call

Every reverse mortgage fee, in plain English

Here is every reverse mortgage fee you will encounter in Australia. No surprises, no fine print. Most fees can be capitalised into the loan, meaning no out-of-pocket cost at settlement. Capitalised fees attract compound interest for the life of the loan, so a $950 fee today costs more than $950 over time.

Application / establishment fee

$0 to $950

Some lenders waive this fee entirely. Others charge up to $950 and allow you to add it to the loan balance rather than pay upfront. Capitalised fees compound at the loan rate.

Valuation fee

$300 to $600

A licensed valuer assesses your property before approval. The cost depends on your property type and location. Rural or unusual properties sit at the higher end of the range.

Settlement and legal fees

$500 to $1,500

Covers the legal work to register the mortgage. You will also need independent legal advice, which is a regulatory requirement for all reverse mortgages in Australia.

Ongoing service fee

$0 to $15 per month

Heartland and P&N Bank charge no ongoing fee. Other lenders charge between $8 and $15 per month, added to your loan balance each period and compounded for the life of the loan.

Government charges

Varies by state

Mortgage registration and discharge fees are set by your state or territory government. In NSW, mortgage registration costs $154.60. Other states differ. Add this to your settlement budget.

Early exit fees

Rare

Most lenders do not charge early repayment penalties on reverse mortgages. Confirm this with your lender before signing, as a small number of products carry a discharge fee in the first few years.

Why this matters

Comparison rate beats headline rate

The comparison rate is the better guide because it folds fees into the true annual cost.

Step 01 · Headline
8.99%
What the lender advertises. Looks competitive on its own, but it leaves out everything that hits your balance after settlement.
Step 02 · Add fees
+0.16%
From a $950 establishment fee and a $10 monthly ongoing fee, both capitalised into the loan.
Step 03 · True cost
~9.15%
The comparison rate. That 0.16% gap is real money over a 15- or 20-year loan with no repayments.

A higher reverse mortgage balance also affects the aged care means test. See our aged-care funding guide for context.

Four ways to reduce what your reverse mortgage costs

Reverse mortgage interest rates are higher than standard home loans. That does not mean you are powerless over the total cost. These four strategies can reduce the interest you pay, sometimes by hundreds of thousands of dollars over the life of the loan.

01 · Make voluntary partial repayments

Best for: minimising compound growth

Most reverse mortgages allow repayments at any time without penalty. Even modest amounts disrupt the compounding cycle. Paying $200 per month on a $100,000 loan at 9% can reduce the 20-year balance by over $150,000.

02 · Choose a line of credit over a lump sum

Best for: phased needs

You pay interest on drawn funds, not the approved limit. If you need $80,000 over time, drawing $20,000 per year means four years of lower interest charges compared to taking the full amount on day one.

03 · Split between HEAS and a private loan

Best for: ongoing income + lump sum

If part of your need is ongoing income and part is a one-off sum, use HEAS at 3.95% for the income component and a smaller private reverse mortgage for the lump sum. Funding $30,000 per year through HEAS saves thousands in annual interest.

04 · Review your loan annually

Best for: rate-sensitive borrowers

Rates change. New lenders enter the market. Your circumstances evolve. An annual review with an independent broker ensures you hold the best available rate. Stryve provides this review at no cost for existing clients.

Keep exploring
reverse mortgages

From the mechanics behind the loan to lender comparisons and aged-care funding, pick the next step.

How a reverse mortgage works

Drawdown options, compounding interest, repayment triggers, and the protections in place.

Compare reverse mortgage lenders

Which lenders are active in Australia, and how private options compare with HEAS.

Check your eligibility

Age, property, title, and existing-mortgage criteria, in plain English.

Home Equity Access Scheme

The government-backed alternative at 3.95% p.a., with fortnightly payments.

Reverse mortgage for aged care

How families use home equity to manage RADs, DAPs, and aged-care funding.

What our customers
say about us

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Common questions about reverse mortgage rates and fees

Private lenders charge between 8.5% and 9.3% variable as of July 2025. The government Home Equity Access Scheme charges 3.95%. Every reverse mortgage interest rate in Australia is variable, meaning it can change without notice as lenders adjust their pricing.

You pay interest on your full loan balance, including all previously charged interest. Because you make no regular repayments, the balance grows each period and the next period's interest applies to that larger number. A $100,000 loan at 9% becomes approximately $236,736 after 10 years with no repayments. Use the Stryve reverse mortgage calculator to model your own loan, rate, and property values.

Reverse mortgage fees include application costs ($0 to $950), valuation ($300 to $600), settlement and legal fees ($500 to $1,500), and ongoing service fees ($0 to $15 per month). Most can be added to the loan balance, but capitalised fees attract compound interest for the life of the loan.

The Home Equity Access Scheme rate of 3.95% is significantly lower than private lenders. HEAS only provides fortnightly income payments up to 150% of the Age Pension rate, with no lump sum option. The right choice depends on whether you need ongoing income, a lump sum, or both.

Yes. Most reverse mortgages allow voluntary repayments at any time without penalty. Regular payments, even small ones, interrupt the compounding cycle and can reduce your total reverse mortgage interest cost by tens of thousands of dollars over the loan's life.

Reverse mortgage rates do not track the RBA cash rate as directly as standard variable home loans. Lenders consider the cash rate alongside their own funding costs, risk margins, and competitive positioning. A cash rate increase does not guarantee an equivalent rate rise on your reverse mortgage, but the broader rate environment influences lender pricing over time.

ASIC's Moneysmart website provides a government-mandated reverse mortgage calculator that shows how compound interest affects your remaining equity over time. Stryve also offers a calculator that lets you model different rates, drawdown strategies, and repayment scenarios specific to your property and borrowing needs.

See how reverse mortgage rates apply to your home

Stryve compares rates across all lenders so you see every option available for your property, age, and borrowing needs. Free, no pressure, by phone or video.

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Reverse mortgage rates in Australia