![\"There](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2026\/02\/e1d1dfe0-02ff-11f1-aada-92e06e4e35ff.png\")
There are schemes that allow retired Australians to tap their home equity to bring in extra money. (Source: Getty) <\/p>\n There are schemes that allow retired Australians to tap their home equity to bring in extra money. (Source: Getty) <\/p>\n
For many Australians, the family home<\/a> is the biggest asset they will ever own.<\/p>\n In retirement, it can also be the biggest source of financial security \u2013 or financial stress.<\/p>\n Rising living costs, medical expenses, or helping out family can put pressure on the retirement savings nest egg, and not everyone wants (or is able) to sell and downsize.<\/p>\n If moving isn\u2019t an option, borrowing against the home<\/a> may be.<\/p>\n RALATED<\/p>\n Two common options for freeing up cash are reverse mortgages and the Home Equity Access Scheme<\/a> (HEAS) offered by Services Australia.<\/p>\n Both allow older Australians to unlock some of the value in their home \u2013 but there are significant differences.<\/p>\n One notable difference is that reverse mortgages can have interest rates as high as 8% or more, whereas HEAS has a lower interest rate of 3.95% per annum.<\/p>\n Before choosing either, it\u2019s important to understand the trade offs and get independent advice.<\/p>\n A reverse mortgage is a type of loan that allows homeowners, typically aged over 60, to borrow against the family home to get funds, and delay any interest repayments until the property is sold or the homeowner passes away.<\/p>\n Reverse mortgages are flexible in how you access the money. You can:<\/p>\n Take a lump sum \u2013 e.g. borrow $250,000 and take a lump sum of $250,000.<\/p>\n Set up a line of credit where funds are available, but you only draw what you need. So, you could have $250,000 available but only draw on $20,000 to pay off a credit card.<\/p>\n Receive regular payments like an income stream.<\/p>\n It\u2019s important to note that each option affects how interest builds up. If you take a lump sum, interest is charged on the full amount from day one. If you draw smaller amounts over time, interest is only charged on what you\u2019ve used \u2013 which can significantly reduce the total cost.<\/p>\n Reverse mortgages aren\u2019t generally counted as income for Centrelink purposes, but the money you hold onto can count as an asset. So, taking a large lump sum could increase your bank balance and that may affect your rate of payment.<\/p>\n The Home Equity Access Scheme<\/a> is a government backed alternative which works similar to a reverse mortgage but usually has a lower interest rate of 3.95% per annum.<\/p>\n To apply, you must:<\/p>\n be of Age Pension age (67 and up) or be partnered with someone over Age Pension age and be eligible for Carer Payment or Disability Support Payment<\/p>\n meet residency and eligibility requirements and<\/p>\n own property in Australia.<\/p>\n You don\u2019t need to be receiving a pension, but you must be eligible for a qualifying<\/a> pension. You could receive up to 150% of the full Age Pension rate<\/a> as an ongoing fortnightly payment. Or if you\u2019re already getting a pension, you can borrow between your normal fortnightly payment and 150% of the full rate of pension.<\/p>\n The scheme allows retirees to top up their fortnightly pension up to $1,768.05 for singles and $2,665.50 combined for couples.<\/p>\n You can also take some of the payments as a lump sum advance. Like a reverse mortgage, the loan is secured against your home and is generally repaid when the property is sold or from your estate.<\/p>\n Weighing up the decision and free financial help<\/p>\n Using your home to fund retirement is a major financial decision, so make sure you do your homework.<\/p>\n You can use the government\u2019s MoneySmart reverse mortgage interest calculator<\/a> to help understand the financial impact interest can have.<\/p>\n There’s also a Home Equity Access Scheme calculator<\/a> on our website. You can use it to:<\/p>\n I would strongly encourage people to speak to Services Australia\u2019s Financial Information Service<\/a> to get free, impartial information about the products and how they work.<\/p>\n While this service doesn\u2019t provide personal financial advice, it helps people to improve their financial capability and builds self-sufficiency by looking at financial options beyond the payments we offer.<\/p>\n Call on 132 300 and say the words \u2018Financial Information Service\u2019 when asked for the reason for your call.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n There is lots to consider before taking one of these options. (Source: Getty) <\/p>\n