New research suggests barely 1% of reverse mortgage market currently being utilised
Australians are sitting on a $600 billion pool of housing wealth that almost no one is tapping.
Deloitte’s 2026 Australian Reverse Mortgage survey estimates that Australia’s reverse mortgage market totals about $5.5 billion in outstanding loan balances (as of 30 June 2025).
This total includes outstanding loans from active open lenders ($3.5 billion), run-off portfolios of lenders no longer writing new business ($1.45 billion) and a smaller amount of outstanding balances in the Government Home Equity Access Scheme (HEAS).
But this is just a mere fraction of the full potential stored in the market.
As of 30 September 2025, Australian households held about $11.9 trillion in residential housing value. Deloitte estimates that around $3 trillion of this housing value is owned by people aged 60 and over, based on population and home‑ownership patterns.
Taking into account regulation around LVRs (for example, a typical 65‑year‑old might only be able to borrow around 25% of their home’s value) and other eligibility criteria, Deloitte estimates a potential addressable reverse mortgage lending market of around $600 billion as of 30 June 2025.
This suggests that only about 1% of the potential reverse mortgage market is currently being utilised.
Deloitte Australia partner and survey lead James Hickey said: “It is clear that an established market already exists for Australians to use equity release products like a reverse mortgage to access the equity in their homes without needing to sell their home. However, current low uptake indicates many don’t know about the product or understand how it may help them meet their financial goals.”
For new borrowers, the average amount drawn at settlement is about $150,000, with older borrowers inclined to take out higher loans. When expressed as a proportion of property value, the average LVR at settlement is about 15%. This is only around half of potential usable equity.
Heartland Australia Bank chief commercial officer Medina Cicak (pictured, right) said: “The Deloitte survey clearly shows that customers are using reverse mortgages for specific, defined needs. Older Australians are not drawing more than required… This indicates a considered and prudent approach to how the product is used, allowing customers to retain flexibility and ensure their future needs can be met.”
Read more: Heartland tightens grip on reverse mortgage market
Many choose to access only part of the available equity, leaving a buffer for future needs or to manage concerns about interest compounding. It shows that reverse mortgages are not typically used to maximise leverage, but rather to address specific lifestyle needs.
Gateway Bank chief marketing officer Adam Norman said: “Many of our customers use their borrowings for a combination of needs like renovations, or buying that new car which they had put off for some time. For others, especially younger retirees in their 60s, the opportunity to travel and enjoy new experiences or to supplement their income is always popular.
“Housing affordability challenges also mean that more households are entering retirement with traditional mortgage debt that requires servicing. These households are increasingly seeking to transfer this debt to a reverse mortgage which requires no ongoing servicing, although the account balance grows with interest.”
Why households use reverse mortgages
Borrowers are using their housing wealth to support a range of day‑to‑day and long‑term needs, with a strong focus on living standards and security in retirement.
Around 45% of borrowers direct funds into home improvements, often to adapt or maintain their property so they can age in place safely and comfortably.
A further 10% use proceeds for medical purposes, including healthcare costs, treatments or mobility aids, underlining the role of equity release in meeting essential health needs.
A significant share of borrowers are using reverse mortgages to repair their balance sheets. More than 40% allocate part of their loan to paying down existing debts, particularly traditional “forward” principal‑and‑interest home loans and other outstanding credit. By doing so, retirees can enter later life with fewer mandatory repayments, swapping regular mortgage instalments for a reverse mortgage structure that does not require ongoing servicing.
Around 25% of borrowers plan to use some of their funds to upgrade their car, while about 18% intend to finance travel, supporting lifestyle and leisure goals in retirement. At the same time, around 20% of borrowers expect to draw on their reverse mortgage as a source of ongoing income, using it to supplement superannuation withdrawals and Age Pension payments.
Credit: 2026 Deloitte Reverse Mortgages survey
Raising awareness
Hickey said households approaching retirement need to think more broadly about how they’ll fund their post‑work lifestyle, looking beyond the age pension and superannuation to voluntary savings, including the wealth tied up in the family home.
“While downsizing is a common way to access home equity, retirees who wish to stay in their homes can consider reverse mortgages or other equity release options as alternatives,” said Hickey.
He noted that reverse mortgages are tightly regulated under the National Consumer Credit Protection Act 2009, with ASIC’s MoneySmart website providing plain‑language guidance for consumers.
However, while specialist brokers are familiar with reverse mortgages, awareness remains low among general mortgage brokers.
“There is an opportunity to improve broker accreditation and increase product awareness,” said Hickey. “Similarly, as superannuation funds develop retirement income strategies, considering housing equity as part of those strategies could further raise awareness and uptake of equity release products.
“Alongside private sector offerings, the Federal Government’s Home Equity Access Scheme continues to grow, providing a public sector alternative for eligible retirees.”
