The Australian government currently offers a form of equity release called the Home Equity Access Scheme (HEAS), previously known as the Pension Loans Scheme (PLS).

The Home Equity Access Scheme enables eligible Australian homeowners who are Age Pension age or older to access a portion of the equity in their home, without the need to sell or downsize.

The loan accrues interest, which is added to the loan balance over time, and it is typically repaid when the homeowner sells the property, moves into aged care, or passes away.

How much can you get under the Home Equity Access Scheme?

The maximum loan amount that can be accessed is based on the value of your property and age component amount. This will generally increase as you get older. On top of the property value and age component, there is a dollar amount cap which is the most you can access per year.

The loan can be accessed as a lump sum, a fortnightly payment, or a combination of both.

It is important to note that if you get a pension, your combined loan and pension payment each fortnight can’t be more than 150% of your maximum pension rate.

If you don’t get a pension you can still access the Home Equity Access Scheme with a fortnightly payment up to the full 150% of the maximum rate of your qualifying pension.

The HEAS isn’t just for Age Pensioners, but if you are Age Pension age or older, your qualifying pension will be the Age Pension.

How does the Home Equity Access Scheme differ from reverse mortgages?

While the Home Equity Access Scheme offers a viable option for accessing home equity, and comes with similar features to a reverse mortgage, reverse mortgages may present a better solution for some homeowners.

This is because, dependent on the provider, a reverse mortgage could offer more flexibility in terms of age, drawdown options and higher borrowing limits, allowing homeowners to access a larger portion of their home equity.

Click here to find out more about the Home Equity Access Scheme and how other types of loans for pensioners compare to a reverse mortgage.

We encourage anyone considering home equity release to do their own research, make use of the resources on our website, and speak to Centrelink, financial and legal advisers, friends and family.

Our customer care team are specialists in reverse mortgages. If you would like to discuss your options please feel free to call us on 1300 889 338 or email us at [email protected].

Source: https://www.servicesaustralia.gov.au/home-equity-access-scheme

This information is accurate as at 10 May 2024 and may change.