A new survey has revealed a vast reserve of untapped home equity, as older Australians cautiously expand their use of reverse mortgages.
Deloitte’s 2026 Australian Reverse Mortgage Survey, produced with Heartland Australia Bank, Gateway Bank, and Inviva, has shown that Australians over 60 are sitting on around $3 trillion of home equity, yet are using reverse mortgages to access only a sliver of it.
The survey estimated that Australians aged 60 and over collectively hold about $3 trillion in housing wealth, with roughly $600 billion potentially accessible under typical loan-to-value ratios.
Yet reverse mortgage balances across public and private providers, including the government’s Home Equity Access Scheme, totalled at only $5.5 billion at 30 June 2025, spread across more than 40,000 households.
New flow in the 12 months to 30 June 2025 was around $750 million, with more than 8,000 households taking out a reverse mortgage for the first time, underscoring that penetration remains close to 1 per cent of accessible equity.
Deloitte Australia partner and survey lead James Hickey said the findings confirmed that home equity remained the sleeping giant of the retirement income system.
“Equity release products such as reverse mortgages and the government’s own Home Equity Access Scheme were identified as being able to significantly boost retirement income and support retirees’ standard of living. However, it noted that usage of such products was, as it is now, low,” he said.
How borrowers are using the product
To understand how the limited slice of equity was being used, Deloitte surveyed the three lenders that write the majority of reverse mortgage volumes.
Across Heartland, Gateway, and Inviva, the average amount of equity accessed over the year to June 2025 was about $150,000, with younger borrowers (65 and under) typically drawing around $125,000 and older borrowers aged 80-plus at $220,000.
The funds are being channelled into a mix of essential and discretionary purposes, with home upgrades and financial housekeeping at the top of the list.
Heartland Australia Bank chief commercial officer Medina Cicak said the data showed that borrowers were treating reverse mortgages as a targeted tool.
“Customers are using reverse mortgages for specific, defined needs. Older Australians are not drawing more than required; on average, they access around 50 per cent or less of their available equity,” she said.
“This indicates a considered and prudent approach to how the product is used, allowing customers to retain flexibility and ensure their future needs can be met.”
Gateway Bank chief marketing officer Adam Norman said the pattern on the ground was one of multipurpose drawdowns, reflecting both lifestyle aspirations and balance-sheet pressures.
“Many of our customers use their borrowings for a combination of needs like renovations or buying that new car which they had put off for some time,” he said.
Norman added that high housing costs and longer loan terms were increasingly following borrowers into retirement.
“These households are increasingly seeking to transfer this debt to a reverse mortgage, which requires no ongoing servicing, although the account balance grows with interest,” Norman said.
Earlier take-up, cautious leverage
The survey showed that reverse mortgages were now being taken up across the full eligible age spectrum (60 through to 80-plus), with a noticeable tilt toward earlier retirement.
In the year to June 2025, 34 per cent of new reverse mortgages were written for borrowers under 70, only 15 per cent were for borrowers aged 80 or over, while the most common age band was 70–74.
Yet the stock of existing borrowers is older, with 26 per cent aged 75–79 and 29 per cent 80-plus, reflecting borrowers ageing in place over time.
Inviva co‑CEO Andre Karney said the age mix shift was reshaping how housing wealth was used alongside superannuation and other assets.
“Many Australians begin transitioning to retirement in their late 50s or early 60s, often reducing their working hours and income,” he said.
“Accessing a portion of housing equity can provide valuable flexibility during that transition, allowing retirees to use their housing wealth alongside superannuation and other assets.”
Despite the earlier take-up, leverage remains modest, with most new loans written in the financial year 2025 carrying initial loan-to-value ratios of about 15 per cent.
Active repayment and evolving distribution
The survey further challenged the perception that reverse mortgages were invariably “set and forget”.
In the 12 months to 30 June 2025, around 12.2 per cent of reverse mortgage balances were repaid in full, and only about 20 per cent of those discharges were triggered by mandatory events.
The remaining 80 per cent were voluntary repayments.
Hickey said repayment behaviour pointed to a sizeable cohort that was actively managing debt.
“The high rate of voluntary repayments of around 10 per cent per annum demonstrates that borrowers are proactively managing their loans, rather than simply leaving the balance to compound,” he said.
The market is also geographically broad, with new business written across all states and territories.
NSW, Victoria, and Queensland together accounted for more than 80 per cent of new borrowers.
While specialist brokers and lenders have developed dedicated propositions, the report noted that awareness of reverse mortgages remained low among generalist brokers.
Hickey said the challenge now was to turn policy recognition of home equity into practical outcomes for retirees.
“Households approaching retirement should be aware of all financial resources available to support their lifestyle, including the age pension, superannuation, and voluntary savings such as home equity,” he said.
[Related: Brighten appoints first reverse mortgages chief]
