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CPA and Registered Tax Agent · Credit Representative

Home Equity Access Scheme vs reverse mortgage: which suits you?

The Home Equity Access Scheme is a Government loan for people of Age Pension age, applied for through Services Australia, with a set interest rate and limited lump sums. A reverse mortgage is a lender product with larger lump sums but lender rates and fees. Both have negative equity protection and both balances grow over time.

Written by James Chee CPA, Credit Representative 517980 of Global Mutual Funds Pty Ltd (ACL 222640), FBAA member·Reviewed by Graham Chee FCPA·Last reviewed

Key facts

Home Equity Access Scheme compared with a reverse mortgage

Home Equity Access Scheme compared with a reverse mortgage
FeatureHome Equity Access Scheme (HEAS)Reverse mortgageSource
Who runs itThe Australian Government, through Services Australia.A credit provider (lender), often arranged through a credit representative.Services Australia: Home Equity Access Scheme
EligibilityAge Pension age, and you or your partner own Australian real estate that can secure the loan.Lenders set their own minimum age, property and loan criteria.Services Australia: Home Equity Access Scheme
Interest rate3.95% p.a., compounding fortnightly (Services Australia, checked 4 November 2026). Government scheme rate, not a lender comparison rate.Set by each lender, plus fees. Compare the comparison rate the lender gives you, and model it in the Moneysmart calculator.Services Australia: interest rate for loans under the Home Equity Access Scheme
Lump sumsUp to 2 advances in any 26-fortnight period, with a combined limit of 50% of the maximum annual Age Pension rate.Lump sum, regular income or line of credit. The amount is set by the lender and usually depends on your age and property value.Services Australia: Home Equity Access Scheme advance payments
Regular paymentsFortnightly loan payments; Age Pension plus loan can total up to 150% of the maximum fortnightly pension rate.Regular drawdowns are possible if the lender offers them.Services Australia: choosing your loan payments
Negative equity protectionNo Negative Equity Guarantee: you won’t repay more than the property’s market value, less other debts secured on it (exceptions apply, such as misrepresentation).Statutory protection for contracts from 18 September 2012: you can’t owe more than the property’s market value.Services Australia: repaying your Home Equity Access Scheme loan
RepaymentVoluntary repayments allowed at any time; otherwise repaid when you sell, move into care or pass away.No regular repayments required; repaid when you sell, move into care or pass away.Services Australia: repaying your Home Equity Access Scheme loan
Who you apply throughServices Australia. A broker cannot lodge a HEAS application for you.The lender, directly or through a credit representative.Services Australia: Home Equity Access Scheme

The HEAS interest rate is set by the Government and can change. Check Services Australia for the current rate before you decide. No lender rates are quoted on this page.

How the two differ in practice

HEAS is designed to top up retirement income in modest, regular amounts. The lump-sum limits are tied to the Age Pension rate, so it rarely suits someone who needs a large amount at once, such as for a renovation or an aged care deposit.

A reverse mortgage can release a larger amount up front, but lender rates and fees apply and differ between products. Interest compounds on both, so the longer the loan runs, the faster the balance grows.

Applying for HEAS

HEAS applications go through Services Australia, not through a broker or lender. Services Australia can explain how a HEAS loan interacts with your pension, and a licensed financial adviser can give advice for your situation.

Where a credit representative fits

If a reverse mortgage or a standard refinance is on the table, a credit representative can compare lender products and must show you the Moneysmart reverse mortgage projections before assessing whether a reverse mortgage is unsuitable for you. Comparing HEAS against those options in writing, with family involved, helps you see what each leaves in the home.

Sources

Common questions

Frequently asked questions

It works in a similar way, because it is a loan secured against your real estate that grows over time, but it is run by the Government through Services Australia rather than by a lender. Its interest rate, payment limits and eligibility are set by the Government.
Services Australia lists 3.95% p.a., compounding fortnightly (checked 4 November 2026). This is a Government scheme rate, not a lender comparison rate, and it can change, so confirm it with Services Australia before deciding.
Only within limits. You can take up to 2 advance payments in any 26-fortnight period, with a combined cap of 50% of the maximum annual Age Pension rate. If you need more at once, a reverse mortgage or another option may need to be compared.
Yes. HEAS has a No Negative Equity Guarantee, with some exceptions, and reverse mortgage contracts entered from 18 September 2012 have statutory protection. Neither stops the loan from using up your remaining equity over time.
Back to the home equity in retirement guide

General information only. It does not take your objectives, financial situation or needs into account and is not financial product, tax or legal advice. Lending criteria, fees and charges apply. Super, Centrelink and aged-care fee advice is referred to a licensed financial adviser.

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