Reverse mortgage

When would your equity run out?

Age of the youngest borrower 65

Home value today $700,000

Lump sum borrowed $105,000

Interest rate 8.50%

Home value growth a year 3.00%

Upfront fees (added to the loan) $1,500

Example lender limit (a lender's policy, not law) 20% of value

Each lender sets its own maximum by age. 20% is an illustration only; ask the lender for theirs.

Your equity reaches zero in

–

Move a slider to see the projection.

Home value –

Loan balance –

Your equity –

Your protection if the loan passes the home’s value

The lender can recover no more than the home’s value — its sale price, or an accredited valuer’s figure — and once it receives that amount your debt is discharged, it must not ask you or your estate for the rest, and it must pay you any excess (National Credit Code ss 86A–86D; Regulations reg 84A). This does not apply if you committed fraud or made a misrepresentation about the loan (s 86E).

What it does not protect is your equity: once the lines cross, what you or your estate get from the home is $0.

Before you sign, a lender or broker must show you projections made on the website ASIC approves (National Consumer Credit Protection Act s 133DB). This widget is not that projection.

View projection by year

Home, loan and equity at each birthday
Year	Age	Home	Loan	Equity

One lump sum at the start, no repayments, one interest rate for the whole projection, compounded monthly; upfront fees are borrowed; no ongoing fees. The home grows by the same percentage every year; a fall in prices is not modelled here. Projected to age 105 (at least 10 years). “Equity reaches zero” is the first whole month in which the loan is at or above the home’s value. Some calculators grow the home monthly at a twelfth of the yearly rate (3% becomes 3.04% a year), which moves this date by a few months. Nominal dollars, not adjusted for inflation. Indicative only. Not financial advice.