Reverse Mortgages: What Retirees Should Know Before Signing

If you're a retiree exploring ways to boost your income, especially while navigating Age Pension eligibility, a reverse mortgage might seem like a smart option. But is it the right fit? Here’s what you should know—especially if you're seeking Centrelink Age Pension help or speaking with a pension adviser for seniors.

What Is a Reverse Mortgage?

A reverse mortgage lets seniors (60+) unlock home equity without selling or moving. Instead of making payments, the lender pays you. The loan is repaid when you sell, move out, or pass away.

This option can complement your Age Pension, but it's important to understand the trade-offs before proceeding.

Pros

• Extra Income: Get tax-free payments to supplement the Age Pension.

• Stay at Home: Remain in your home while accessing funds.

• Flexible Payouts: Choose lump sums, monthly income, or a credit line.

• No Monthly Repayments: You don’t make payments as long as you meet the conditions.

Cons

• High Fees: Reverse mortgages come with upfront costs.

• Lower Inheritance: Your home equity shrinks over time.

• Impact on Pension: It may affect Centrelink entitlements depending on how funds are used.

• Risk of Foreclosure: If you don’t pay property costs or maintain the home, you could default.

What to Do Before You Sign

• Speak to a Pension Consultant: A professional can explain how a reverse mortgage may affect your Age Pension application.

• Get Centrelink Help: Ensure you're meeting reporting requirements to avoid surprises.

• Use a Pension Advisor: Advisors for seniors can assess whether a reverse mortgage or other options better suit your financial needs.

Need Help Applying for the Age Pension?

If you're unsure how a reverse mortgage could impact your eligibility, or need help with your Age Pension application, our team can guide you. Whether it’s Age Pension form help, Centrelink support, or finding the right pension adviser for seniors, we're here to make retirement easier.