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.
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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.
01
The private market range
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.
02
Why these rates sit above home loans
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.
03
All rates are variable
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.
01
When HEAS fits
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.
02
When a private reverse mortgage fits
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.
03
Splitting between both
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.
Compare HEAS with a Stryve brokerEvery 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.
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Common questions about reverse mortgage rates and fees
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