For many older Australians, retirement brings a familiar paradox: asset-rich but cash-poor. You may own a home worth over a million dollars yet find yourself counting pennies at the supermarket or delaying home repairs. The Home Equity Access Scheme (HEAS) — formerly known as the Pension Loans Scheme — is the Australian Government's answer to this problem.
Despite being one of the safest and most affordable equity release products available, HEAS remains vastly underutilised. This guide explains exactly how it works, who qualifies, what it costs, and whether it's right for you.
HEAS is a government-backed reverse mortgage administered by Services Australia. It lets you borrow against the equity in your Australian real estate to receive tax-free fortnightly payments, lump-sum advances, or both.
Unlike a traditional home loan, no regular repayments are required. The loan accumulates compound interest and is generally repaid when you sell the property or from your estate after you pass away. Because it's run by the government — not a commercial bank — it comes with structural protections, low setup costs, and highly competitive interest rates.
Your combined fortnightly income from your pension plus HEAS payment cannot exceed 150% of the maximum fortnightly Age Pension rate. This means:
Total lifetime borrowing is capped by your Maximum Loan Amount, calculated based on: the property value you offer as security, how much equity you choose to protect, and your age (or your younger partner's age for couples). The older you are at application, the more total equity you can borrow.
This is significantly lower than commercial reverse mortgages, which typically charge 7.5%-9.5% p.a. Interest compounds fortnightly, so your debt grows over time and should be factored into long-term estate planning.
No regular repayments are required while you live in your home. The loan must be repaid when:
You can make voluntary repayments at any time without penalty.
One of HEAS's most important protections: by law, you can never owe more than the market value of your property. If your loan balance somehow exceeds your home's value (through falling property prices or a very long retirement), the Australian Government absorbs the difference.
Your family will never be left with a personal debt, and you will never be forced out of your home.
Key benefit: HEAS payments won't reduce your existing Age Pension. The loan is completely separate from the pension income test.
As well as regular fortnightly payments, you can access up to two lump-sum advances in any 26-fortnight period for one-off expenses — medical bills, home repairs, a new car, or travel. The maximum combined lump sum is capped at 50% of the maximum annual Age Pension rate (approximately $14,937 for singles and $11,259 per member of a couple in 2025-26).
| Feature | HEAS (Government) | Commercial Reverse Mortgage |
|---|---|---|
| Interest rate (2025-26) | 3.95% p.a. | 7.50%-9.50% p.a. |
| Setup fees | Very low (property registration only) | High (valuation, legal, broker fees) |
| No Negative Equity Guarantee | Yes - legislated | Yes - under NCCP Act |
| Government-backed | Yes | No |
| Large upfront lump sums | Limited (capped at 50% of annual pension) | More flexible |
| Pension impact | No impact on pension income test | Depends on product structure |
Robert (71) and Margaret (69) own a home in suburban Adelaide worth $800,000 - no mortgage. They receive a combined part Age Pension of $1,000/fortnight but need an extra $500/fortnight to live comfortably and cover rising bills.
They apply for HEAS using their home as security, choosing to protect $200,000 of equity for their children. Services Australia approves a $500/fortnight loan payment - well within their 150% combined limit. Total income rises to $1,500/fortnight, tax-free.
Over 5 years, their accumulated loan (including compound interest at 3.95%) grows to approximately $72,000 - a small fraction of their $800,000 home. They stay in their home, live comfortably, and their estate remains healthy.
HEAS is an exceptional tool for retirees who are asset-rich but cash-poor. With government backing, a low interest rate, no regular repayments, and the No Negative Equity Guarantee, it's almost always safer and cheaper than a commercial reverse mortgage.
Because your home is your most valuable asset, discuss it with your family and a licensed financial adviser first. You can also contact the Services Australia Financial Information Service (FIS) for free, independent guidance - call 132 300 and ask for a FIS appointment.
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View All CalculatorsMike Backman — Founder of Aussie Property & Crypto Calc. Mike researches Australian property, taxation and personal finance and maintains all calculators using ATO, ASIC, RBA and state government data.
Last updated: 19 July 2026 · About this site · Report an error