For many older Australians, most of their wealth is tied up in their homes. After decades of paying off a mortgage, the house may be fully owned but the cash flow often isn’t enough to cover everyday living costs, home repairs, or medical bills.
That’s where a Reverse Mortgage comes in. It allows seniors to access part of their home equity without having to sell or move out. But how much can you actually borrow in 2026 — and what rules determine the limit?
Let’s unpack everything you need to know before you apply.
What Is a Reverse Mortgage?
A Reverse Mortgage is a type of home loan available to Australians aged 55 and above. Unlike a regular mortgage, you don’t make monthly repayments. Instead, the loan amount (plus interest) is repaid when you sell your home, move into aged care, or pass away.
It’s called a “reverse” mortgage because the usual flow of payments is reversed: instead of you paying the bank, the bank pays you, using your home equity as security.
Many seniors use a Reverse Mortgage to:
- Boost their retirement income
- Pay off remaining debts
- Fund home renovations or accessibility upgrades
- Cover medical or aged care expenses
- Simply enjoy life’s “little luxuries”
[ ALSO READ: Life’s Little Luxuries: How Reverse Mortgage Can Help You Enjoy Retirement More ]
How Much Can You Borrow in 2026?
There’s no fixed amount for everyone. The maximum loan amount depends on several factors, most importantly, your postcode, your age and your home’s value.
Generally, the older you are, the more you can borrow. Here’s a guide based on common lender policies* in 2026:
| Age of Youngest Borrower | Approx. % of Home Value You Can Borrow |
| 55* | 10%-15% |
| 60 | 15% – 20% |
| 65 | 20% – 25% |
| 70 | 25% – 30% |
| 75+ | 30% – 45% (some lenders up to 50%) |
*some lenders only. Rules and eligibility are subject to regular change
For example, if your home is worth $700,000 and you’re 70 years old, you may be able to borrow around $175,000 to $210,000.
Different lenders have different loan-to-value ratio (LVR) limits. These are often guided by responsible lending standards to ensure that borrowers retain enough equity in their property over time.
Factors That Affect Your Borrowing Limit
Aside from age and home value, several other factors influence how much you can access:
1. Existing Mortgage
If you still owe money on your home, that balance must be paid off first using the proceeds of your Reverse Mortgage.
2. Property Type and Location
Metropolitan homes usually qualify for higher LVRs than rural or non-standard properties.
3. Lender Policy
Each lender sets its own minimum and maximum loan amounts, interest rates, and fees.
4. Loan Purpose
Some lenders may restrict how funds can be used (e.g., home improvements vs. investment).
5. Your Age Pension Entitlement
Depending on how funds are structured, a large lump sum might affect Centrelink benefits.
Key Rules and Protections
Modern Reverse Mortgages in Australia are regulated to protect consumers. Here are the most important rules in 2026:
- No Negative Equity Guarantee – You can never owe more than your home’s market value when it’s sold.
- Mandatory Projections – Lenders must show you how the loan balance will grow and how your home equity may change over time.
- Independent Legal Advice – You must obtain independent legal advice before signing, ensuring you understand the terms.
- Cooling-Off Period – You have time to reconsider after approval before finalising the loan.
These safeguards were designed to make Reverse Mortgages safer and more transparent than they were decades ago.
What to Ask Before You Apply
Before signing, take time to understand the full picture. Here are important questions to ask your lender or broker:
- What percentage of my home value can I borrow?
- What is the interest rate, and how often does it compound?
- Are there any setup or ongoing fees?
- How will this affect my Age Pension or Centrelink payments?
- What happens if I move into aged care or sell my home early?
- What are the options for repayment or refinancing?
- How will this affect my estate and what I leave to my family?
The more you know, the better you can plan.
Alternatives to Consider
A Reverse Mortgage isn’t the only option for accessing your home equity. Depending on your goals, you could also explore:
- Downsizing to a smaller home
- Government Home Equity Access Scheme (for eligible pensioners)
- Line of Credit Loans or Equity Release Products
- Family Equity Agreements
A good financial adviser or Reverse Mortgage specialist can help compare these options based on your situation.
[ ALSO READ: Reverse Mortgage or Downsizing: Which Option is Best for Your Retirement? ]
Key Takeaways
- The amount you can borrow with a Reverse Mortgage in 2025 typically ranges from 15% to 45% of your home’s value, increasing with age.
- Borrowing limits vary depending on lender policy, property value, and your personal circumstances.
- Reverse Mortgages are now safer due to government regulations like the No Negative Equity Guarantee.
- It’s essential to get independent legal and financial advice before proceeding.
Want to learn more about Reverse Mortgage? Find out more about how does a Reverse Mortgage work? or download your FREE REVERSE MORTGAGE GUIDE.
Ready to Apply? You can now check your eligibility online or call Seniors First on 1300 745 745.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial advisor before you make any decision.