Australians Under 60 Turn to Reverse Mortgages for Early Retirement, July 19

More than 40,000 Australians have taken out reverse mortgages to fund retirement without selling their homes, with demand from younger borrowers in their mid-to-late 50s driving a surge. Over 8,000 mortgages were signed in the past year alone. The trend reflects a widening gap between superannuation balances and the actual cost of retirement, pushing homeowners to release equity instead of downsizing.

Why younger Australians are choosing reverse mortgages

Homeowners in their mid-to-late 50s are increasingly tapping into home equity to fund early retirement and cover major expenses. Shane Churchward, 56, retired 17 days ago and used a reverse mortgage to fund a year-long trip to Thailand. Graham and Fran Burns chose the same route to avoid the downsizing process entirely.

Darren Moffatt, CEO of Seniors First, a leading reverse mortgage broker, said the trend is clear. “We’re definitely seeing a trend towards younger people and we’re also seeing a trend towards people in wealthy areas.” The home equity loans are funding renovations, debt repayment, new cars, regular income, and travel.

The superannuation gap driving the shift

Moffatt said the gap between superannuation and the cost of retirement is widening. “We are seeing people who have worked hard, paid off their home and built significant equity who now find superannuation alone doesn’t match the reality of retirement,” he said. More than 5.5 million Australian homeowners are aged over 55, with almost 2.5 million expected to retire within the next decade.

Deloitte’s 2026 Australian Reverse Mortgage Survey found the sector has drawn on only around 1% of the estimated $3 trillion in housing equity held by Australians aged 60 and over, pointing to significant room for growth.

Where reverse mortgages are most popular

Four of New South Wales’ five highest-ranking postcodes for reverse mortgage activity are coastal locations: Wamberal (2259) and The Entrance (2261) on the Central Coast, Byron Shire (2486) and Jervis Bay (2540) on the South Coast, and Northbridge (2068) on Sydney’s Upper North Shore. In Queensland, the Gold Coast dominates, with Broadbeach (4218), Helensvale (4212), and Southport (4215) holding the highest rates.

Most borrowers are concentrated along the east coast, with 80 per cent in key affluent areas including Broadbeach and Southport in Queensland, Byron Bay, Sydney’s upper north shore, and Melbourne’s city and western suburbs.

Interest rates and the no negative equity guarantee

Borrowers are warned that reverse mortgages can carry interest rates as high as 8 per cent. However, Moffatt dispelled a common myth: “That’s not the case. People can stay in the home as long as they want, until they die, and they can never owe more than what the home is worth.” This no negative equity guarantee protects borrowers from owing more than their home’s value.

The federal government offers a similar, much cheaper scheme, giving seniors access to lump sums or fortnightly cash payments as an alternative to private reverse mortgages.

Final Thoughts

Reverse mortgages are reshaping retirement planning for younger Australians who want to stay in their homes and communities. With superannuation alone falling short and only 1% of available home equity tapped so far, the market is poised to grow significantly.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.