How does a Heartland Reverse Mortgage

A retired couple sit enjoying the view, free from financial stress with the help of a reverse mortgage.

What’s special about a Heartland Reverse Mortgage?

A Heartland Reverse Mortgage could give you the financial freedom to release some equity from your home without having to sell.

  • You can continue to enjoy your community and the comforts of living in your home for as long as you choose
  • You’ll remain the owner of your home, benefitting from any potential increase in property value
  • There is no requirement to make any loan repayment until the end of the loan, usually when you sell the house, move into long-term care or pass away
  • The variable interest rate allows you to make voluntary repayments if you wish to
  • You can access the funds you need, as and when you need them
  • The amount you can borrow depends on factors, such as your age, location and property value

Reverse mortgage drawdown options

Flexibility is key. That’s why we offer three drawdown options, with interest only charged once funds are drawn down from your loan.


Reverse mortgage initial advance

This is the first lump sum payment, paid to you at the start of your loan – the minimum drawdown for this option is $5,000, unless the funds are to be used for in-home care. It is the perfect option for those wanting to repay a mortgage or other debts, renovate their home, buy a new car, or even go on a trip to see the grandkids. In addition to this first payment, you can receive future funds as needed through the options below.


Reverse mortgage regular advance

A regular advance is a great option for those who plan to draw on their loan to supplement their income, as it gives you the power to set a regular monthly, quarterly or annual payment for up to 10 years.

The minimum regular drawdown amounts for this option are $300 per month, $625 a quarter or $2,500 annually.


Reverse mortgage cash reserve

The cash reserve can be applied for if you require future access to funds. The minimum request is $2,500 and is subject to approval and a loan agreement.

Remember: no interest is charged on any amount of the facility that has not been drawn down. There may be fees and charges payable for different loan options, which you can learn more in detail by reading our fee schedule.

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Reverse mortgage interest rates

Heartland only offers a variable interest rate. This provides flexibility, as voluntary repayments can be made towards your reverse mortgage at any time.

The interest rate is calculated on the daily balance and added monthly to your account. Our current Standard Reverse Mortgage interest rate is:

9.75% p.a. (comparison rate 9.78% p.a.*)

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

Answers to frequently asked questions

The maximum amount available to borrow is calculated by applying a Loan to Value Ratio (LVR), which is based on the age of the youngest person applying for the loan and increases by 1% for each year from age 60. The LVR is applied to the valuation of the property. An example of how the maximum LVR is applied is detailed below for a Heartland Reverse Mortgage.

Standard Heartland Reverse Mortgage*

Age of youngest borrower Maximum % of home's value available
55** 15%
60 20%
65 25%
70 30%
75 35%
80 40%
85 45%
90 50%

*Subject to lending criteria, property location and change. If the security property is an investment property or holiday home, the maximum amount available is reduced by 25% under our Secondary Property Loan.

**Where one borrower is aged 60 or over and has a partner between the ages of 55 and 59 you may be able to access a loan on your owner occupied home.

The aged pension can affect everyone differently. You can access some of the equity in your family home usually without impacting Government entitlements. However, this will be dependent on your financial situation and assets. Heartland recommends that you contact Centrelink to discuss your individual circumstances when applying for a reverse mortgage.

With a Heartland Reverse Mortgage you do not need to make regular repayments. The total loan amount, including accumulated interest, is usually repayable when you move permanently from your home; this could occur when you sell your property, move into long-term care or pass away. The loan is usually repaid from the sale proceeds of your home, and the balance is then retained by you or your estate.

Although a reverse mortgage is designed to last for as long as you wish to keep your home, you may repay all or part of your loan at any time without penalty, providing you with flexibility.

Anyone aged 60 or over who owns their own home can apply for a Heartland Reverse Mortgage.

Property criteria

Your property must be residential, of conventional construction and in good repair. It must also meet our minimum property criteria, including valuation, size and location.

The property should be mortgage free, or if there is a mortgage outstanding, it must be repaid with your Heartland Reverse Mortgage.

To allow us to establish the value of your home, and therefore calculate how much you could be eligible to borrow, we will need to assess the value and condition of the property. We will arrange for a registered valuer to visit your home to assess its value. A copy of this assessment will be provided to you.

Yes, you will always own your home and continue to live in it as long as you wish, while benefiting from any capital growth. Only when you move permanently from your home (or in the case of joint applicants, when both of you have moved permanently from your home) will the loan be repayable.

Heartland understands that some customers (who we call nominated borrowers) may not be the sole owners of the home they live in. In these circumstances Heartland will need to be contacted to ensure the application can proceed.

Funds can be used for almost anything that helps you live a more comfortable retirement.

Many people use the loan to fund home repairs or improvements, repay debt, travel to visit family, pay for medical procedures, upgrade to a more reliable car, assist with in-home care, or a host of other uses to make life easier and more comfortable. Fundamentally, a Heartland Reverse Mortgage is designed to help you live a better retirement.

Yes. At Heartland we want you to make an informed decision, taking into consideration your future needs and objectives, as taking out a reverse mortgage may affect equity available later down the track. This includes considering aged care costs, and how you intend to pay for this, along with your desire to leave an inheritance.

You should also consider any other options which may be available, such as downsizing, to ensure a reverse mortgage is right for you.

Heartland assists you to do this as part of our thorough application process.

If you move into another house, you can apply to transfer your Heartland Reverse Mortgage to your new home. If we agree to transfer the loan, fees will apply and will be added to your loan balance.

If the loan is initially taken out over your investment property, you are able to rent out your home, subject to the lease meeting Heartland’s requirements.

If you wish to lease out your owner occupied home, please contact Heartland to discuss your situation. This is not always possible and is based on your specific circumstances and loan conditions.

When your cash reserve (if any) is fully drawn you can apply to increase your total loan amount. Increases are based on the age of the youngest person, the current property value and the total loan balance at the time of application.

Fees will apply and a new valuation of your home will be required. This will be confirmed at the time of application. You will also be required to obtain independent legal advice on the further advance loan.

Yes. You can take out a Heartland Secondary Property Loan. This type of loan comes with all the benefits of a Heartland Reverse Mortgage, but with the added flexibility of using your residential investment property or holiday home as the security.

Please note that under a Heartland Secondary Property Loan, the loan balance will become due and payable when the security property (in this case the secondary property) is sold or the last nominated borrower no longer resides in their owner-occupied home (or primary residence). This could be due to moving house, moving into a retirement village, aged care or passing away.

Yes, you can use a reverse mortgage to pay for aged care.

If a member of a couple is still residing in their home (security property), a Heartland Reverse Mortgage can be used to pay for the partner’s entry into care.

Our Aged Care Option also allows for a higher LVR, with examples as follows:

Age of youngest borrower Maximum % of home's value available
60 20%
65 25%
70 30%
75 35%
80 40%
85 45%
90 50%

Our Aged Care Guide provides more detail regarding Heartland's reverse mortgage for aged care finance offerings, and an index of acronyms to help you navigate the terminology can be found here.

We hope this page has provided a useful, quick summary on how our Reverse Mortgage works. If you have any questions, please do not hesitate to contact our friendly team on 1300 889 338 or at [email protected].

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Case study

David and his wife Margaret own their own property in Melbourne valued at $1,000,000.

At ages 63 and 72 (respectively) they applied for a Heartland Reverse Mortgage to repay $33,000 of outstanding debt, $25,000 of home improvements and an extra $2,000 to cover their solicitor and some other small costs, making up a total initial advance amount of $60,000.

They also wanted to use their reverse mortgage to supplement their income, so they applied for a regular advance of $1,500 per month for 5 years, totalling $90,000.

They also had the option to apply for a cash reserve for future needs or unexpected expenses, subject to approval and a loan agreement.

They were able to borrow the total amount requested as it met Heartland’s credit criteria, with the condition that they refinance their debts on settlement.

Their Heartland Reverse Mortgage helped them to support ongoing income, and removed the requirement to make regular loan repayments on outstanding debt, helping them to manage their cash flow more easily.

See our interest rate page for more information about how reverse mortgage compounding interest works.