Reverse mortgages in Australia (2025): Trends, stats & what it means for retirees

Australia’s reverse mortgage market continued to strengthen throughout 2025, with the product gaining popularity as a strategic retirement tool for older homeowners facing rising debt, longer lifespans, and limited superannuation.

Key stats at a glance*:

• Half of new Australian retirees carry a mortgage into retirement.
• 43% of superannuation is withdrawn to pay off mortgage debt by retirees.
• The Home Equity Access Scheme (HEAS) now supports over 16,000 participants, up from 770 six years ago.
• Household Capital’s loan book exceeds $700 million, with growing demand from retirees aged 60 to 100+.
• The total Australian reverse mortgage market is valued at $6.3 billion, including commercial and government loans.
• Heartland Bank’s loan book stands at $1.98 billion, with $309 million in new lending in FY2025.

*References; see below

What’s driving the growth?

1. Rising mortgage debt in retirement

Retiring mortgage-free was once the norm. Today, not so much.

“Half of all Australians who are retiring do so with substantial levels of household debt.” – The Australian

With property prices and loan terms rising, many over-55s are now tapping into their home equity to cover costs without selling up.

2. Superannuation isn’t stretching far enough

Many retirees are draining their retirement savings to pay off debt. On average, 43% of their superannuation is withdrawn in one hit to clear mortgages—a move that compromises future income security.

3. Helping the next generation into the market

Self-funded retiree parents are increasingly using reverse mortgages to unlock equity for their adult children—either to help with home deposits or pay off existing debts.

Product evolution & new providers

Government scheme gaining traction*

The Home Equity Access Scheme (HEAS) is rapidly expanding in popularity. Once relatively unknown, the scheme now has more than 16,000 participants—a massive leap from just 770 six or so years ago.

• Open to homeowners over 67
• Doesn’t require pension income
• Pays a fortnightly income stream or lump sum backed by home equity

It’s an increasingly attractive alternative for asset-rich, income-poor retirees with modest top up income or lump sum requirements who want to age in place.

Specialist lenders are booming*

Specialist reverse mortgage lenders like Heartland Bank and Household Capital have seen double-digit growth in demand. Heartland reported $309 million in new lending this financial year, marking an 18.5% year-on-year increase.

New equity release products and lenders have also entered the market, including Midkey, and Longview with their innovative home-reversion products.

Trends to watch in 2026 and beyond

1. More retirees are using equity for aged care, renovations, and medical needs.
2. Early access (from age 55) growing in popularity as people delay downsizing.
3. Increasing focus on early inheritance strategies using reverse mortgages.
4. New lenders and new equity release products are coming online.

Takeaways for Australian retirees in 2025

Challenge	Reverse mortgage solution
High mortgage debt in retirement	Tap equity instead of super or downsizing
Inadequate super balances	Preserve super by using home equity
Want to help kids buy property	Enable early inheritance (self-funded retiree centric)
Want to stay at home longer	Fund aged care or renovations from home equity

Final thought

In 2025, reverse mortgages are no longer considered a last resort. For many Australians, they’re a strategic retirement planning tool—offering flexibility, control, and financial breathing room.

References:

“Half of new Australian retirees carry a mortgage into retirement.”	According to a 2022 report by the Australian Housing and Urban Research Institute (AHURI), nearly 50% of retirees aged 55–64 still had a mortgage. This trend has continued to rise. Source
“43% of superannuation is withdrawn to pay off mortgage debt by retirees.”	A study by Challenger and COTA (Council on the Ageing) found that up to 45% of retirees used super to pay off debts, primarily mortgages. Source
“The Home Equity Access Scheme (HEAS) now supports over 16,000 participants, up from 770 six years ago.”	As per Services Australia and 2024 budget updates, HEAS has grown to over 16,000 participants, from fewer than 800 in 2019. HEAS Overview
“Household Capital’s loan book exceeds $700 million.”	Household Capital confirmed in a 2024 media release their loan book surpassed $700 million. Household Capital
“Heartland Bank’s loan book stands at $1.98 billion, with $309 million in new lending in FY2025.”	Heartland Group’s FY2025 update (ASX/NZX release) confirms these figures. Investor Reports
“Reverse mortgage market is valued at $6.3 billion in Australia.”	Market analysts estimate the total market (including private, bank, and HEAS lending) at around $6–6.5 billion. This includes commercial lenders and government products. Finder Analysis
“Heartland reported $309 million in new lending in FY2025, an 18.5% increase.”	As per Heartland’s annual report, $309 million in new loans marks an ~18% growth from FY2024. Heartland Annual Report
“HEAS open to homeowners over 67, no pension income required.”	As per Services Australia, eligibility is 67+ and applicants don’t need to receive the Age Pension to qualify. HEAS Guide