Home Equity Access Scheme: What you need to know

For many older Australians, having wealth tied up in the family home can make day-to-day expenses challenging. The Home Equity Access Scheme (HEAS) is a government-backed program that allows eligible seniors to unlock some of the value in their home without selling it.

What is HEAS?

HEAS is essentially a reverse mortgage run by the Australian Government. If you are of age pension age and own real estate in Australia, you can apply for regular loan payments from the government. These payments come in either fortnightly instalments or up to two lump sums per year.

It’s designed to help retirees who may not qualify for a full pension or who need extra income. The loan is secured against your property and is not considered taxable income. You don’t need to make repayments while you're alive, though interest does accumulate.

Who can apply?

You may be eligible if:

• You are age pension age.
• You or your partner own real estate in Australia.
• You receive a part or no pension, or would qualify if not for the assets or income test.
• You’re not bankrupt and your property is properly insured.

Even self-funded retirees can access this scheme, as long as they meet the age and property requirements.

How much can you borrow?

You can receive:

• Fortnightly payments up to 150% of the full age pension.
• Advance lump sums up to 50% of the annual age pension, taken once or split into two payments every 26 fortnights.

The total amount you can borrow depends on your age and the value of your home. The government uses a formula that includes an age-based component, so older applicants can usually borrow more.

You can also nominate an amount to exclude from your property value if you want to preserve equity and leave something for your family.

What about interest and repayment?

The current interest rate is currently 3.95% per annum (compounding fortnightly). The loan does not need to be repaid until:

• You sell the property.
• You pass away.
• You choose to repay early.

When the loan ends, your estate or surviving partner will repay the debt. The scheme’s “No Negative Equity Guarantee” ensures that you’ll never owe more than your home is worth. 

Key benefits

• No regular repayments required during your lifetime.
• You remain the owner of your home.
• Flexibility to adjust or stop payments.
• Peace of mind through the No Negative Equity Guarantee.

Things to consider

Before applying, think about:

• How much of your home equity you’re willing to give up.
• The long-term impact on your estate and inheritance.
• Alternative options like downsizing or private loans.
• Making sure your property stays well maintained and insured.

Final word

HEAS can be a smart way to boost your retirement income while staying in your home. But it’s a long-term decision. If you would like to know more, give us a call so we can weigh your options carefully to make sure it suits your lifestyle and future plans.