How does a Reverse Mortgage work?


Many seniors are now living in homes that hold much of their wealth. By accessing this without having to move you can achieve the things you have always wanted to do.

The Heartland Reverse Mortgage enables you to access the equity in your home without having to sell your property.

So how does a reverse mortgage work?

The Heartland Reverse Mortgage is designed to help you manage your financial requirements by accessing only what you need, as and when required. The amount you are able to borrow depends on a number of factors, such as your age and the value of your home. You are able to live in your home for as long as you wish, benefiting from any potential increase in property values. Making regular repayments is not necessary, although you are free to do so at any time.

You will always retain ownership of your home. The Reverse Mortgage will become repayable when you sell your property, move into long-term care or pass away.

Who can apply and what other criteria are there?

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

Property Criteria

Your home must be of a conventional build. It must also meet our minimum property valuation criteria and may be dependent on location.

The property should be mortgage free. However, if there is a mortgage outstanding it must be repaid on settlement of the loan.

As security for your loan, we must be the first and only mortgage registered on title. This means you will be unable to take out an additional mortgage from another lender using your home as security.

How much can you borrow?

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 customer applying for the loan, and increase by 1% for each year from age 60. The LVR is applied to the valuation of the property. An example of the LVR’s applied are detailed below:

Standard Reverse Mortgage*

Age of youngest borrowerMaximum % of home's value available
60 15%
65 20%
70 25%
75 30%
80 35%
85 40%
90 45%

Aged Care Option*

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

*If the security property is an Investment Property or Holiday Home, the maximum amount available is reduced by 25%.

What can you do with the money?

A Heartland Reverse Mortgage is yours for you to do whatever you choose.

Many people use the Reverse Mortgage to fund home repairs or improvements; travel to visit family members; pay for medical procedures; upgrade to more reliable cars; help their children purchase homes of their own or a host of other uses to make life easier and more comfortable.


We hope this page has provided a useful, quick summary on how a reverse mortgage works. Please do not hesitate to contact our friendly team on 1300 889 338 or [email protected] if you have any questions.

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