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How Much Will Your Equity Release Cost?
Calculate projected debt growth over time for reverse mortgages in Australia
If you're over 55 and own your home, you might be wondering where to get an equity release that actually works for your situation. It’s not just about getting the most cash upfront. The best place isn’t always the one with the highest advertised rate or the flashiest ad. It’s the place that understands your life, your goals, and your risks - and doesn’t push you into a deal that traps you later.
What Equity Release Really Means
Equity release lets you unlock money tied up in your home without selling it or moving out. In Australia, the most common type is a reverse mortgage. You borrow against your home’s value, and the loan - plus interest - gets paid back when you sell the house, move into aged care, or pass away. There’s no monthly repayment, but the debt grows over time. That’s the trade-off: cash now, less inheritance later.
Not all equity release products are the same. Some charge compound interest, others simple. Some let you take money as a lump sum, others as regular payments. Some have no negative equity guarantees. You need to know exactly what you’re signing up for - and who’s offering it.
Where to Start: Independent Advisers Over Banks
Most people think banks are the safest place to get equity release. After all, they’re big, familiar, and seem stable. But here’s the truth: banks rarely offer the best deals. Their reverse mortgage products are limited, often come with high fees, and their advisers are trained to push their own products, not yours.
The best place to start is with an independent financial adviser who specializes in equity release and is licensed under the Australian Securities and Investments Commission (ASIC). These advisers aren’t tied to one lender. They compare offers from multiple providers - including specialist lenders like Equity Bank, Home Equity Solutions, and Reverse Mortgage Australia - and pick the one that fits your needs.
Look for advisers who are members of the Equity Release Council (Australia). They follow strict rules: they must explain all costs, warn you about impacts on Centrelink benefits, and never pressure you into a decision. You’ll pay a fee for their advice - usually between $1,500 and $3,000 - but that’s often less than the extra interest you’d pay over 10 years with a bad deal.
What Makes a Provider the Best?
Not all lenders are created equal. Here’s what to look for in a provider:
- No negative equity guarantee: This means you’ll never owe more than your home’s sale value. All ASIC-approved providers must offer this, but confirm it in writing.
- Fixed interest rates: Avoid variable rates. They can spike and make your debt balloon faster.
- Flexible drawdown options: Can you take money in chunks? This helps control how fast your debt grows.
- Low setup fees: Some charge $3,000+ in legal and valuation fees. Top providers keep it under $1,500.
- Transparent total cost: Ask for a projection of your debt in 5, 10, and 15 years. If they can’t show you this, walk away.
For example, in 2025, the average interest rate for a reverse mortgage in Australia is 7.2% for fixed-rate products. But some lenders offer 6.4% if you take a smaller loan-to-value ratio (under 40%). That difference could save you $45,000 over 15 years.
Red Flags That Mean Walk Away
Equity release scams are real. Here’s what to watch for:
- Pressure to sign quickly: Legitimate providers give you 14 days to think. If they say, “This offer expires tomorrow,” it’s a scam.
- They don’t mention Centrelink: If you get the Age Pension, taking too much cash can reduce your payments. A good adviser will calculate this for you.
- They push you to invest the money: If they say, “Put this in shares to beat the interest,” they’re making a commission. Don’t do it.
- No face-to-face meeting: All equity release agreements require independent legal advice. If they skip this, it’s illegal.
One client in Brisbane took out $200,000 from her home in 2023 after being told it was “risk-free.” She didn’t realize her pension would drop by $600 a month. By 2025, her debt had grown to $280,000 - and she couldn’t afford to move. That’s why advice matters more than the lender.
Alternatives to Equity Release
Before you commit, ask yourself: is there another way?
- Selling and downsizing: If your home is too big, selling and moving to a smaller place can free up cash with no debt. Many retirees do this and end up with more money than they started with.
- Family loans: Some families help with a loan or gift. It’s informal, but it avoids interest and keeps control of the home.
- Part-time work or rental income: Renting out a room or working 10 hours a week can cover expenses without touching your home’s equity.
- Government assistance: Check if you qualify for the Pension Loans Scheme - it’s a government-backed loan with lower interest than private reverse mortgages.
One couple in Melbourne sold their 4-bedroom house for $1.2 million and bought a 2-bedroom unit for $750,000. They pocketed $450,000, kept their pension, and now pay $150 less a month in bills. No debt. No risk.
How to Pick Your Provider: A Simple Checklist
Use this before you sign anything:
- Get at least three quotes from different lenders - not just one adviser’s preferred provider.
- Ask for a written projection of your debt in 5, 10, and 15 years.
- Confirm the lender has a no-negative-equity guarantee.
- Ask your adviser: “What would you do if this were your parent’s home?”
- Get independent legal advice - never use the lender’s lawyer.
- Wait 14 days. If you’re still unsure, walk away.
There’s no rush. The equity in your home isn’t going anywhere. But the wrong deal can haunt you for the rest of your life.
Final Thought: It’s Not About the Money - It’s About Control
The best place to get an equity release isn’t a bank, a website, or a TV ad. It’s the room where you sit with someone who listens - someone who asks about your grandchildren, your health, your fears - and then builds a plan around that, not just your house value.
If you’re considering equity release, don’t just shop for the lowest rate. Shop for the right advice. Because when it comes to your home, your future, and your peace of mind, the cheapest option is almost never the best one.
Can I still get an equity release if I have an existing mortgage?
Yes, but you’ll need to pay off your existing mortgage first using part of the equity release funds. Most lenders require your home to be free of other loans before approving a reverse mortgage. Your adviser will calculate how much you need to clear your current debt and how much you’ll have left over.
Will equity release affect my Age Pension?
It depends on how you use the money. If you take it as a lump sum and keep it in the bank, it counts as an asset and may reduce your pension. If you spend it on home repairs, travel, or daily living costs, it doesn’t count. The best approach is to take smaller amounts over time - this keeps your assets low and your pension intact.
What happens if I want to move or sell my home later?
You can sell your home at any time. The lender will be paid back from the sale proceeds, and any leftover money goes to you or your estate. If the home sells for less than the loan balance, you owe nothing - thanks to the no-negative-equity guarantee required by law in Australia.
How much can I borrow with equity release?
It depends on your age, home value, and lender. Most people can borrow between 20% and 50% of their home’s value. The older you are, the more you can access. For example, a 65-year-old with a $800,000 home might get $320,000, while a 75-year-old with the same home could get $400,000.
Is equity release safe for my children’s inheritance?
It reduces what’s left for your heirs. If you borrow $300,000 and interest grows it to $600,000 over 15 years, your home’s equity is eaten up. But if you use the money to live comfortably and avoid aged care costs, it may be worth it. Talk to your family early - and consider setting aside part of the funds for them if that’s important to you.