HEAS vs Reverse Mortgages: What’s the best way to unlock your home’s equity in retirement?

As retirement stretches longer and living costs rise, more Australian homeowners are looking for ways to free up cash without selling their home.

Two increasingly popular options are the Home Equity Access Scheme (HEAS) and a commercial reverse mortgage.

Both let you access the wealth (equity) in your home without the need to sell — but they’re very different products, with different benefits, costs, and risks.

Here’s what you need to know before making a decision.

What are these products?

The Home Equity Access Scheme (HEAS)

The HEAS is a government-run scheme that lets eligible Australians get 26 fortnightly payments per year (or the equivalent value, per 12 months) from Centrelink, using their home equity as security.

• Designed to top up the Age Pension or provide retirement income.
• Run by Services Australia.
• Loans are repaid later — typically from your estate or when the home is sold.

Commercial reverse mortgage

A reverse mortgage is a private loan from a bank or lender, secured via a first registered mortgage against your home.

• You can receive a lump sum, regular income, or a line of credit.
• No regular repayments are required while you live in the home.
• The loan plus interest is repaid when you sell or pass away.

Key differences at a glance

Feature	HEAS	Reverse Mortgage
Provider	Government (Centrelink)	Banks or private lenders
Eligibility	Age Pension age (67+), own Australian property	55+, own property
Loan Type	Fortnightly payments, or up to 26 payments in advance per year.  The amount available depends on how much Age Pension you receive	Lump sum or flexible access
Interest Rate	3.95% p.a. (Nov 2025)	Typically, 7.35 to 9% p.a.
Loan Limits	Up to 150% of Age Pension	Based on age, equity, lender policy
Use of Funds	Retirement income top-up	Any purpose — flexible
Fees	Minimal	Includes setup costs, legal fees, govt charges
Access Speed	Slower — via Centrelink	Faster — via lenders and brokers
Negative Equity Protection	Yes (government guaranteed)	Yes (since 2012)

Similarities Between HEAS and reverse mortgages

• You stay in your home — no need to sell.
• No regular repayments are required.
• Interest compounds over time, increasing the loan balance.
• Both are regulated and include negative equity protection.
• Both reduce the value of your estate over time.

Pros & cons of each option

HEAS pros

• Low, government-backed interest rate (currently 3.95%)
• Safe and simple product
• Great for conservative retirees who want a steady income or whose need for funds is lower

HEAS cons

• Small payments only — not suitable for large expenses
• Limited flexibility
• Processing is slow — managed through Centrelink
• Can be confusing what amount is available per annum

Reverse mortgage pros

• Access larger amounts (great for aged care, debt consolidation, etc.)
• Access a clearer amount of money to meet your objectives
• Choose lump sum, income stream, or line of credit
• Flexible use of funds — your money, your way

Reverse mortgage cons

• Higher interest rates (rates up to 9.00% [Nov. 2025])
• Set up fees will apply  
• Interest compounds faster — higher rate of interest means the loan balance grows more quickly
• Can affect Age Pension if not structured correctly

Which one is right for you?

You want…	Best fit
A modest top-up to your pension for everyday costs	HEAS
A lump sum for medical, debt, or aged care	Reverse mortgage
Maximum flexibility and control	Reverse mortgage
A low-risk, low-cost way to access small amounts of equity	HEAS
Fast access to equity	Reverse mortgage

Our take: Structure matters more than the product

Choosing between HEAS and a reverse mortgage isn’t about one being better than the other — it’s about what fits your goals, income needs, estate planning, and Centrelink position.

Many retirees can even use both, strategically, depending on what stage of retirement they’re in.

Final word

Your home is more than just a place to live — it’s often your biggest financial asset. If you want it to support your retirement, make sure you use it wisely.

Understanding the difference between HEAS and reverse mortgages will assist you in choosing the right option for you.

Want to find out more?

We specialise in helping older Australians unlock the wealth in their home and can assist you to compare your options clearly, avoid impacts to your Centrelink, and structure equity release around your lifestyle, goals, and future care needs.

Get in touch with us today — whether you’re just starting your research or ready to take the next step.

E: hello@yourhomeequity.com.au

P: 08 6285 9815