Equity release after 60: three structures, three different outcomes

The short version (TL;DR)

Australians aged 60 and over collectively hold about $3 trillion in home equity, of which roughly $600 billion is potentially accessible via reverse mortgages — and only about 1% is currently being used (Deloitte Australian Reverse Mortgage Survey, March 2026). Three structures release that equity: a standard line of credit against the home, a reverse mortgage product, or a downsizer contribution into super after selling. Each has different cash flow, tax, Centrelink and legacy implications. The right structure usually isn't the one with the lowest rate — it's the one that matches what you want the next 15-20 years to look like.

If you're over 60 and considering tapping equity, a 30-minute coffee is the cheapest way to see all three side by side.

The plain English version

If you bought your Bulimba home before 2015, the value has roughly doubled. Brisbane house values have grown strongly over the past five years (Cotality Home Value Index, April 2026). Most homeowners over 60 in our area haven't recalculated their accessible equity since the last time they refinanced.

There are three ways that equity gets unlocked, and each one is suited to different circumstances.

The straightforward line of credit

A standard equity loan against the home — the same product type younger borrowers use, just secured against an unencumbered or low-debt property. Borrowers draw funds as needed and pay interest on what's drawn. Suits people who want flexibility and have either ongoing income or a clear repayment plan.

A reverse mortgage

A specialist product. Borrowers don't make repayments — interest compounds against the equity. The loan is repaid when the property is sold, the borrower moves to aged care, or the estate is settled. Suits people whose primary need is income or one-off cash and who don't want monthly repayments. Tightly regulated under ASIC and a small group of specialist lenders.

Downsizer contribution into super

Eligible Australians aged 55 or over may contribute up to $300,000 each (so $600,000 for a couple) into super as a downsizer contribution from the proceeds of selling a qualifying home, without affecting the standard contribution caps. Subject to ATO requirements. This isn't a loan — it's a structural move.

If you're working out which of these matches your situation, the first conversation is free, and you'll walk away with something useful even if you don't go ahead.

The detail (for those who want it)

Why so much equity is sitting unused

Deloitte's March 2026 survey put hard numbers on the gap. Outstanding reverse mortgage balances across private lenders and the federal government's Home Equity Access Scheme reached about $5.5 billion as of 30 June 2025, spread across more than 40,000 households — against an estimated $600 billion of accessible equity in the cohort. The gap is striking but not surprising. A few patterns explain it.

Many people over 60 paid off their mortgage years ago and haven't dealt with a bank since. The mental friction of taking on "debt" again is real. Reverse mortgages have historical reputation issues from the 1990s and 2000s that newer products and the BCCP (Best-Interests Code of Conduct for reverse mortgage lenders) have largely resolved — but the reputation lingers.

Many people are also waiting for the "right" time. Watching the market, watching the interest rates, watching the kids' situations. For most equity-release decisions, the right time is when the use of funds is clear, not when the market peaks.

Structure 1 — line of credit / equity loan

The standard product. The home secures a facility drawable as needed. Interest applies only to drawn funds.

For a Bulimba homeowner with a paid-off house valued at $2.3 million, a typical equity facility might be 60-70% of valuation — so $1.4 million to $1.6 million in available funds. Most people draw a small fraction of that, and the unused portion costs nothing.

Loan-to-value ratio (LVR)

The size of the loan as a percentage of the property's value. A 60% LVR on a $2.3 million home means a $1.38 million loan. Lenders apply different LVR caps depending on the product, the borrower's age, the property type and the use of funds.

Best suited to: people who want flexibility, have some serviceability (income to cover interest), and are using the funds for something with a clear pathway — renovating, helping family, smoothing retirement income, or bridging to a downsize.

The trade-off: it's still a loan with interest payments. Serviceability assessments apply, which means age and income both matter. Some lenders cap loan terms based on borrower age (e.g. loan must be repaid by age 80 or 85), which can push monthly repayments higher than expected.

Structure 2 — reverse mortgage

A specialist product designed specifically for retirees. The defining feature: no repayments required during the borrower's lifetime in the home. Interest compounds against the equity, and the loan is repaid when the property is sold, the borrower moves into aged care, or the estate settles.

Best suited to: people whose primary need is income or one-off cash, who want to stay in the home, and who don't have the income to service a standard loan.

The trade-off: compounding interest reduces the equity available to the estate. A $200,000 draw at age 70 with no repayments can compound to $500,000+ by age 85 depending on rates. Where the inheritance value of the home matters to estate plans, the maths needs to be done explicitly with that in view.

The lender pool is small — only a handful of specialist providers operate in this segment, and rates are typically higher than standard equity loans.

Structure 3 — downsizer contribution

This isn't a loan. It's a tax-effective way to move equity from your home into superannuation when you're already planning to sell.

The ATO's downsizer contribution rules let people aged 55 and over contribute up to $300,000 each from the proceeds of selling a home they've owned for 10+ years, into super, outside the normal contribution caps. For a couple, that's $600,000.

Best suited to: people already planning to downsize, who want to tax-efficiently move proceeds into super for retirement income drawing.

The trade-off: it requires actually selling. The conditions are specific — eligibility around home ownership history, contribution timing (within 90 days of settlement), age, and the contribution cap interactions with other super rules. ATO is the authoritative source; don't take any blog (including this one) as the final word on eligibility.

Comparing the three across the things that actually matter

	Line of credit	Reverse mortgage	Downsizer contribution
Repayments during your lifetime	Yes (interest minimum)	No	N/A — not a loan
Stay in the home	Yes	Yes	No (you're selling)
Effect on inheritance value	Reduces by drawn amount + interest	Reduces by drawn amount + compounding interest	Reduces by sale + tax outcomes
Centrelink implications	Drawn loan may affect asset test depending on use	Drawn loan may affect asset test depending on use	Sale and contribution have specific Centrelink rules — check before
Lender pool	Available across most major lenders	Specialist lenders only	Not applicable

The honest answer to "which is right for me?" depends on what you want the next 15-20 years to look like — staying put vs. moving, income vs. one-off cash, whether the house's inheritance value matters to your estate plan, and whether you want to keep dealing with monthly repayments.

Where Centrelink and tax sit in the picture

Equity release decisions interact with Centrelink (Age Pension eligibility, asset test) and tax (capital gains exemptions, super contribution rules) in ways that aren't always obvious. A standard line of credit drawn for personal use may not affect the Age Pension asset test the same way it does if drawn for an investment property purchase.

This is the area where "talk to your accountant" stops being a brush-off and becomes load-bearing advice. The right decision often isn't a pure mortgage decision; it's a mortgage decision sitting inside a tax and Centrelink picture.

A note on family pledge / Bank of Mum and Dad

Adjacent to equity release for over-60s is the question of using your equity to help adult children buy. The structures here — parental guarantor, family pledge, gifted deposit — are different products with different exposures, covered in our Using your equity service page. The short version: structures exist to help without exposing your retirement to your child's mortgage. They need to be set up carefully, with everyone understanding what happens if the child's circumstances change.

What the first conversation usually covers

We typically start with your retirement income picture, then look at the equity available, then map the three structures against your specific situation. No product recommendations — just a clear picture of what each option would mean for cash flow, Centrelink, and your estate.

Still wondering if equity release makes sense for you? The most useful thing is usually a 30-minute coffee. Book one with Danny or call him on 0423 161 855.