Reverse mortgages are like a normal home loan but designed for those aged 60 or more. They can allow you to release the equity in your home to live a more comfortable retirement, without having to sell. Importantly, reverse mortgages are subject to the National Consumer Credit Protection Act (NCCP), which means there are a number of borrower protections and safeguards in place such as Lifetime Occupancy and a No Negative Equity Guarantee. These protections may also allow you to take out an Equity Protection Option, giving further assurance, and peace of mind.

One of the key benefits to a reverse mortgage is flexibility, which allows you to tailor your loan to suit your retirement needs. There are many drawdown options to choose from (initially as a lump sum, regular advances for up to 10 years, or cash reserve ‘line of credit’) and your loan can be used for a range of purposes such as consolidating debt, home improvements, day to day expense, upgrading your car, traveling, and in-home or residential aged care.

Interest is added to the loan monthly, and is only repayable once you move permanently from your home. However, you are free to make repayments at any time.

A reverse mortgage is a great option for someone who would like flexibility with their funds, the ability to redraw voluntary repayments, and continue to fully own and live in their own home for as long as they choose.

A Home Reversion is a different type of product to a reverse mortgage or the Pension Loans Scheme. Instead of taking out a loan, you agree to sell a portion of your property to a provider or investor in return for a lump sum payment, with any future growth in property value shared (based on the percentages of ownership).

It is important to understand that the payment received is often much lower than the current market value. For example, you could sell 65% of the future value your home, but only receive somewhere between 25% and 40% of the value up front depending on your age.

Home Reversion is also considered a property transaction and are not subject to National Credit Consumer Protection Acts (NCCP). Protections in place are dependent on provider.

A Home Reversion can be a good option for those that want to access home equity without accumulating any debt, however there is limited availability for this product compared to a reverse mortgage or the Pension Loans Scheme, which are both available in most locations.

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Here is an outline of some of the key differences, this is general and is also dependent on provider:

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	Reverse Mortgages (dependent on provider)	Pension Loan Scheme	Home Reversion
Type	Loan	Loan	Selling a portion of your home
Age	60+	Age pension age	60+
Locations	Available in all capital cities and major regional cities and centres	Available in most locations	Limited availability
Loan/Payment Amount	Minimum - $5,000 Maximum - Unlimited (based on age and property value only)	Up to 1.5 times fortnightly age pension	Based on age and share amount you are looking to sell from your home
Payment Types	Lump sum Income stream (monthly, quarterly, or annually) Cash reserve (like a ‘line of credit’) You can have a combination of all three	Income stream (fortnightly only)	Lump sum only
Loan Repayments	Not required until the end of the loan Voluntary repayments can be made at any time Must be repaid within 12 months of the borrower moving permanently from their home	Not required until the end of the loan Voluntary repayments can be made at any time Must be repaid when house is sold or within 14 weeks of the borrower passing away	Not applicable (Not a loan)
Consumer Protections	Subject to the National Consumer Credit Protection Act (NCCP)	Not subject to the National Consumer Credit Protection Act (NCCP)	Not subject to the National Consumer Credit Protection Act (NCCP)