Reverse Mortgage Calculator
Project how a reverse mortgage balance grows over time as compounding interest accrues against your home equity without regular repayments.
Your results
Calculation breakdown
- Compounding balance
- amount × (1 + rate)^years
- Future property value
- current value × (1 + growth)^years
Worked example
Drawing $150,000 at 8.5% for 10 years grows to about $335,000 owing, against a home projected to be worth around $1.18 million at 4% growth.
Assumptions
- Assumes no repayments are made and interest compounds annually.
- Does not automatically apply a no negative equity guarantee; independent advice is strongly recommended before proceeding.
How this calculator works
This calculator projects the growing balance of a reverse mortgage or home equity release loan, where interest compounds over time because no regular repayments are made, and compares the projected balance with an estimated future property value.
Frequently asked questions
Why does a reverse mortgage balance grow so quickly?
Because no repayments are typically made, interest compounds on both the original amount and the accrued interest, so the balance can grow significantly over a long period.
What is a no negative equity guarantee?
Most Australian reverse mortgages include a guarantee that you will never owe more than the value of your home, but this calculator does not automatically cap the projection, so compare it against the estimated property value shown.
Should I get advice before taking out a reverse mortgage?
Yes, reverse mortgages have long-term consequences for your estate and pension eligibility, so independent financial and legal advice is strongly recommended.
Results are estimates only and are not financial, tax, legal or credit advice.