Cost‑of‑living pressures are driving a jump in demand for reverse mortgages, with more Australians in their 50s using home‑equity products to manage rising expenses.
Darren Moffatt, CEO of Seniors First and a reverse mortgage specialist, told Yahoo Finance that interest from “younger retirees” has reached unprecedented levels.
“We are seeing more Australians in their mid-to-late 50s exploring reverse mortgages as a way to stay on top of rising costs,” Moffatt said.
Traditionally used by older retirees as a last‑resort income supplement, reverse mortgages allow homeowners to draw on equity as a lump sum, line of credit, or regular payment while remaining in the property and retaining exposure to any future capital growth. With transaction costs and stamp duty making downsizing expensive, equity release is increasingly seen as a way to bridge the gap between retirement and superannuation access. Economists also note that many older Australians who would like to downsize are staying put, leaving a large amount of housing wealth tied up in family homes.
The retirement funding gap is widening as more people carry large mortgages later into life, with separate modelling suggesting many borrowers are now likely to reach their mid‑50s still owing hundreds of thousands of dollars.
Deloitte’s 2026 Australian Reverse Mortgage Survey estimates Australians over 60 hold around $3 trillion in home equity, with roughly $600 billion potentially accessible via structured equity release products. The survey found 34% of new reverse mortgages are now written to borrowers under 70, signalling a clear shift in borrower profile.
Alongside commercial reverse mortgages, more retirees are turning to the federal government’s Home Equity Access Scheme (HEAS), which offers a non‑taxable, reverse‑mortgage‑style loan. Yahoo Finance reports HEAS demand has risen 21% over the past 12 months, with a 249% increase in take‑up since 2021.
Services Australia general manager Hank Jongen has urged caution.
“Using your home to fund retirement is a major financial decision, so make sure you do your homework,” Jongen wrote in an earlier Yahoo Finance column, noting that borrowing against the home will affect future equity and estate planning.
Moffatt warned that “people are feeling the pressure everywhere you look from the weekly shop, fuel, power bills, rent, and mortgage repayments”, and added, “We expect demand to surge again if interest rates rise as predicted next month.”
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