Survey highlights low uptake of reverse mortgages among Australian retirees

Australians over the age of 60 are sitting on $3 trillion in home equity according to a study conducted by Deloitte, but just 1 percent of those potentially available funds have been tapped.

The 2026 ‘Reverse Mortgage’ survey from Deloitte, performed in collaboration with lenders Heartland Australia Bank, Gateway Bank and Inviva, pegged the accessible figure via equity release products at an estimated $600 billion.

As it stands however, the sum accessed totalled around $5.5 billion up until the middle of last year, representing roughly 40,000 households, with the firm, and the federal government, contending adoption can improve living conditions for retirees.

“Equity release products such as reverse mortgages and the government’s own scheme have been identified as being able to significantly boost retirement income and support retirees’ standard of living,” said Deloitte partner James Hickey. “However, current low uptake indicates many don’t know about the product or understand how it may help them meet their financial goals.”

The study also sought to gain a clearer picture of the borrowing trends for those who have taken advantage of the products, with the average amount accessed in the twelve months to last June coming to $150,000, or commonly 15 percent as a ‘loan-to-value ratio’. Those above 80 years old pushed the figure up to around $220,000, while under-65s were closer to $125,000.

As for the purpose of taking out the loans, the majority cited home improvements or debt repayments, while vehicles, travel and regular or additional income were also common reasons given, with 10 percent requiring support for medical purposes. Other categories included gifts, aged care requirements, and in some cases with the intention of reinvesting.

“The survey clearly shows that customers are using reverse mortgages for specific, defined needs,” commented Heartland chief commercial officer Medina Cicak. “Older Australians are not drawing more than required; on average, they access around 50 percent or less of their available equity. This indicates a considered and prudent approach to how the product is used.”

Reverse mortgages during retirement

While reverse mortgages generally attract monthly compound interest, they don’t typically require regular servicing and are repaid upon the sale of the property, or in the event of the last lendee’s departure or death. Notably, more than a third of the recent approvals were for people under the age of 70, with some reverse mortgage customers now even being as young as 55.

“The data shows that reverse mortgages are increasingly being used earlier in retirement, not just later in life,” said Inviva co-CEO Andre Karney. “Many Australians begin transitioning to retirement in their late 50s or early 60s, often reducing their working hours and income. Accessing a portion of housing equity can provide valuable flexibility during that transition.”

Should the lending practice initially strike as somehow predatory, Deloitte notes the segment is highly regulated and might be an attractive option for those who don’t want to sell up. The survey also highlighted that over 10 percent of reverse mortgages taken to date had been repaid in full, with around 80 percent of those through voluntary repayments rather than mandatory triggers.

Hickey concluded; “The high rate of voluntary repayments of around 10% per annum demonstrates that borrowers are proactively managing their loans, rather than simply leaving the balance to compound. While downsizing is a common way to access home equity, retirees who wish to stay in their homes can consider reverse mortgages or other equity release options as alternatives.”