As a parent, your desire to support your children doesn’t end when they become adults. But what if most of your wealth is tied up in your home?
For many older Australians, a Reverse Mortgage could offer a way to unlock that wealth—and give your children a financial helping hand when they need it most.
But is it the right move?
Let’s explore the options, risks, and realities.
How Does a Reverse Mortgage Work
A Reverse Mortgage allows homeowners aged 55 or over to access the equity in their home as cash—without selling or making regular repayments. The loan is repaid when you sell the home, move into aged care, or pass away.
At Seniors First, we’ve helped thousands of retirees use Reverse Mortgages for a range of needs—including helping their kids with a home deposit, education costs, or survive a financial crisis.
[ ALSO READ: Is a ‘Bank of Mum & Dad’ home deposit for the kids’ mortgage a good idea? ]
Using a Reverse Mortgage to Support Family
Yes, it’s possible—and completely legal—to use Reverse Mortgage funds to help your adult children. Whether it’s:
- Contributing to a first home deposit
- Supporting them through tough times
- Giving an early inheritance
- Paying off their debts or medical bills
…you’re in control of how the money is used.
But remember: every dollar you borrow reduces your home equity—and possibly the inheritance you leave behind.
Things to Consider Before You Do
Helping family is noble—but it’s wise to think things through.
- Will it impact your own future needs?
Only borrow what you’re comfortable parting with. Make sure you keep enough equity for aged care, emergencies, or future health costs. - Have you spoken with your children and family?
Open conversations help manage expectations, prevent misunderstandings, and ensure everyone is on the same page. - How will it affect your Age Pension?
Reverse Mortgage funds are generally exempt from the asset test for 90 days, but any unused funds are deemed under the income test. Spending it quickly (e.g., gifting to children) might help avoid pension reductions. - Have you explored alternatives?
In some cases, the Home Equity Access Scheme (HEAS)—offered by the Australian Government—may be a better fit, especially if you need a smaller, regular income stream.
[ ALSO READ: How Baby Boomer Parents Gift Kids a Home Deposit with Reverse Mortgage ]
Seniors First Tip
Many of our clients treat Reverse Mortgage support for kids as a “living inheritance”—a chance to enjoy the impact of their legacy now, rather than later. With proper planning and professional advice, this can be a win-win.
What to Do Next
If you’re thinking about using your home equity to help your children, we can guide you every step of the way.
At Seniors First, we specialise in Reverse Mortgages for Australians aged 60+, and we’re here to help you make the best decision for your future and your family.
📞 Call 1300 745 745 to speak with a Reverse Mortgage expert
📩 Or visit seniorsfirst.com.au to learn more
Disclaimer: This is general information only and does not constitute financial advice. We recommend speaking with a licensed adviser before making any decisions.