How a reverse mortgage works.

How does a Heartland Reverse Mortgage work?

Have peace of mind in retirement with a Heartland Seniors Finance Reverse Mortgage.

We understand that we all have different needs when it comes to retirement. That’s why we offer flexible options to help tailor your loan to your needs – whatever stage of your retirement you’re in.

About our Heartland Reverse Mortgage.

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

Our Reverse Mortgage is designed to help you manage your financial requirements by accessing what you need, as and when required. The amount you can borrow depends on a number of factors such as your age and the value of your home. Our Reverse Mortgage allows you to live in your home for as long as you wish, so you can continue to benefit from any potential increase in property values. Making regular payments is not necessary, as interest is added to the loan each month. However, you are free to do so at any time – giving you extra flexibility.

Importantly, you will always retain ownership of your home. A Reverse Mortgage only becomes repayable when you sell your property, move into long-term care or pass away.

Reverse Mortgage drawdown options

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

  • 1

    Reverse Mortgage Initial Advance

    This is the first lump sum payment, paid to you at the start of your loan. 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 either through Regular Advances or a Cash Reserve facility (like a ‘line of credit’).

    A minimum lump sum payment of $5,000 must be initially drawn down.

  • 2

    Reverse Mortgage regular advance

    A regular advance is a perfect option for those who plan to draw on their loan to supplement their income. The biggest draw card for this option is that it gives you the power to set a specific amount as 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.

  • 3

    Reverse Mortgage Cash Reserve

    A cash reserve is a great option for those who want to make sure they have access to funds in case of an emergency expense, healthcare, unplanned home repair or when that once in a lifetime trip comes along.

    The good news is the money is easily accessible via a request form. Similar to all our other loan options, you don’t pay any interest on the undrawn amount. The minimum drawdown is $2,500.

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.

Reverse Mortgage interest rates.

Heartland only offers a variable interest rate, providing flexibility as voluntary repayments can be made to 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:

6.34% p.a. (Comparison Rate 6.36% 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.

ASIC'S Money Smart
Reverse Mortgage Calculator

Use ASIC's Money Smart Reverse Mortgage Calculator to provide an illustration of the impact of your Heartland Seniors Finance Reverse Mortagage on the equity in your home.

The reverse mortgage calculator helps you work out:

  • How much your debt will increase over time and what this means for the equity in your home
  • How changes in interest rates and house prices could affect the equity in your home
Money Smart Calculator

Answers to frequently asked questions

We understand there is a lot to consider when taking out a Reverse Mortgage, so here are the answers to some commonly asked questions.

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

Standard Heartland Seniors Finance Reverse Mortgage*

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

*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%.

Yes. You can take out a Heartland Seniors Finance Secondary Property Loan. This type of loan comes with all the benefits of a Heartland Seniors Finance 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 Seniors Finance 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), Heartland Seniors Finance Standard 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.

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

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 Seniors Finance Reverse Mortgage is designed to help you live a better retirement.
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 Seniors Finance 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 Seniors Finance will need to be contacted to ensure the application can proceed.
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.
When your cash reserve facility (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.
If you move into another house, you can apply to transfer your Heartland Seniors Finance 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.
With a Heartland Seniors Finance 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 Heartland Seniors Finance 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.
Yes. At Heartland Seniors Finance 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.
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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