How it works

  • You receive fortnightly loan payments, and can take some as a lump sum within limits.
  • The interest rate is 3.95% a year, compounding every fortnight on the loan balance. It has been 3.95% since 1 January 2022 and is set by the Minister.
  • Interest keeps accruing until the loan is repaid, usually when the home is sold or from the estate.
  • A no negative equity guarantee applies: you will not owe more than the home is worth.

How compounding adds up

Services Australia's example: a first fortnightly payment of $750 attracts $1.14 interest by the next pay day; after the second payment the balance is $1,501.14, and so on. Small at first, but over ten or fifteen years the balance can grow substantially, reducing what is left for you or your estate.

When it can make sense

  • Asset-rich, cash-poor retirees who want to stay in their home.
  • Covering a gap until another asset is sold or a pension starts.
  • Compared with commercial reverse mortgages, the rate is often lower, but the scheme has payment limits.

Estimate payments with our HEAS calculator, and see Age Pension assets test and cost-of-living help for homeowners. Talk to family early and get independent advice, as Services Australia recommends.

Quick answers

What is the Home Equity Access Scheme interest rate?

3.95% a year, compounding fortnightly, since 1 January 2022.

Can I owe more than my home is worth?

No. A no negative equity guarantee applies to HEAS loans.

Sources

General advice warning. This article is general information only and does not take into account your objectives, financial situation or needs. Rules, rates and thresholds change; check the sources above. Consider the relevant PDS and our Financial Services Guide and seek personal advice before acting. FinForce is a Corporate Authorised Representative (No. 001241242) of Financial Force Pty Ltd, ABN 42 091 425 464, AFSL 238337.

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