Despite holding an estimated $3 trillion in residential property, Australian over-60s have tapped into less than 1% of the equity available to fund their retirement, according to new data from Heartland Bank Australia and Deloitte.

According to the report released yesterday, home equity release remains an underutilised tool for easing pension pressure, despite being flagged as a key solution in the Government’s 2020 Retirement Income Review.

“It is clear 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” said Deloitte’s James Hickey, author of the report.

“Equity release products such as reverse mortgages were identified as being able to significantly boost retirement income and support retirees’ standard of living.”

The total addressable market for reverse mortgages sits at $600 billion while current utilisation remains at $5.5 billion as of 30 June 2025.

A reverse mortgage is a financial solution for homeowners to access property equity while retaining full ownership, offering a repayment-free structure and a ‘No Negative Equity Guarantee’ to ensure total debt never exceeds the home’s market value.

Heartland Bank Australia is a market leader in reverse mortgages, accounting for over 40% of the Australian market.

“Many Australians don’t realise the home they’ve worked a lifetime to pay off is the key to the retirement they’ve always dreamed of,” Heartland Bank Australia Chief Commercial Officer Medina Cicak said.

“That $600 billion in home equity is more than just a statistic: it’s the dignity and financial security that every Australian deserves. We want to help people understand that the wealth built into their four walls can be used to fund a much happier, stress-free retirement.”

Growth in the sector was driven by over 8,000 households accessing a reverse mortgage for the first time, contributing to $750 million in new lending over the 12 months to 30 June 2025.

Regional activity is now a primary driver of growth, with the Gold Coast and Sunshine Coast accounting for approximately 60% of lending in Queensland, followed by over 50% of NSW activity concentrated in the Hunter and Illawarra regions.

Borrowers are using home equity to address a diverse range of immediate and long-term financial needs which include: renovations (45%), debt consolidation (40%), vehicle upgrades (25%), supplementing regular retirement income (20%) and travel (18%).

The report revealed that when new borrowers first take out a loan, they typically withdraw $150,000, accounting for only 15% of their home’s total value. About 80% of borrowers voluntarily repaid their loans in full during the 12 months to June 2025.

“Repayment trends highlight the discipline among Australian retirees, who are strategically drawing upon their wealth only as required to sustain a comfortable standard of living,” Ms Cicak said.

“Reverse mortgages represent a significant opportunity for older Australians to age in place, providing the financial flexibility to stay in the homes and communities they love. I encourage borrowers to perform diligent research and involve their families in the discussion to ensure the product aligns with their long-term goals.”

To read the full report, head here.

Deloitte Reverse Mortgage survey snapshot

• Market scale: Total Australian residential housing value reached $11.9 trillion as of 30 September 2025, with an estimated $3 trillion held by Australians aged 60 and over.
• Sector value: The reverse mortgage market reached $5.5 billion in outstanding loan balances as of 30 June 2025, supported by $750 million in new annual settlements.
• New growth: Over 8,000 new households entered the market in the last year.
• Regional reach: Lending is increasingly concentrated in regional hubs, accounting for over 50% of new activity in NSW (Hunter and Illawarra) and approximately 60% in QLD (Gold Coast and Sunshine Coast).
• Average drawdown: The typical initial drawdown at settlement is $150,000, representing a 15% Loan-to-Value Ratio (LVR).
• Demographics: Couples represent 45% of new borrowers, followed by single females at 29%.
• Primary age group: The most common age band for new borrowers is 70–74.

Heartland Group is a dual-listed trans-Tasman financial services group with banking operations in New Zealand and Australia, collectively servicing more than 185,000 customers.

Learn more about Heartland’s heritage in ‘The heart of it’, a book and short film featuring the voices of more than 40 past and present employees, customers, directors and shareholders to honour all those who helped shape Heartland.

This is available from Heartland’s website: heartlandgroup.info/about-heartland/our-brand-story.