Step 4.9

What are my financial options to move into an aged care home?

Reverse Mortgage

This is also known as Equity Release.

If you own your house outright you can borrow against the value of your house.  There are no repayments (although you can make a repayment if you wish.)  You repay the loan when you sell the house or when the last borrower passes away.

Interest rates on reverse mortgages tend to be higher. and are added to the loan balance each month - they can add appreciably to the debt.

When a home loses value or if the borrower stays in the home for many years the loan amount can eventually exceed the value of the home.  Usually, however, the borrower (or their estate) does not have to repay any additional loan balance.    When you apply for a reverse mortgage, always be sure to get a 'no negative equity' guarantee.

You can receive a reverse mortgage as a lump sum or it can be available with a redraw facility so the owner can draw down money as they need it. 

You won't get a reverse mortgage for the full value of your property.  Typically it is between 30 and 50 percent of the property's value.

Know that particularly in times of declining home values or if the borrower continues to live in the home for many years the rising loan balance can eventually grow to exceed the value of the home

Selling the family home 

Personal circumstance and what has been negotiated with the aged care home will decide whether or not you decide to sell the family home prior to entering an aged care home.

If you do not sell your home to move into an aged care home it will be exempt from the age pension assets test for two years from the date you move into the aged care home.  For more information call the Department of Human Services on 132 300.

The refundable lump sum paid to an Aged Care provider is exempt from the Aged Care Combined Assets and Income Assessment.

Renting out your home

If you rent your home to cover the periodic payments in an aged care home, the rental income is counted for the Combined Income and Assets Test used for means-tested daily care fees.

Have a question? Open our discussion forum

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A special thanks to our contributors

Caroline Egan

DCM Media, agedcare101

Caroline has a wealth of experience writing within the retirement and aged care sector and is a contributing journalist for the and agedcare101 blog and accompanying newsletters.

Ian Horswill


Ian is a journalist, writer and sub-editor for the aged care sector, working at The DCM Group. He writes for The Weekly Source, agedcare101, and the DCM Institute fortnightly newsletter Friday. Ian is in daily contact with CEOs of retirement living, land lease and the aged care operations and makes a new contact every week. He investigates media releases, LinkedIn and Facebook for a good source for ideas for stories.

Lauren Broomham

Retirement and Aged Care Journalist

Lauren is a journalist for, agedcare101 and The Donaldson Sisters. Growing up in a big family in small town communities, she has always had a love for the written word, joining her local library at the age of six months. With over eight years' experience in writing and editing, she is a keen follower of news and current affairs with a nose for a good story.

Jill Donaldson


Jill has been practicing as a clinical physiotherapist for 30 years. For the last 13 years she has worked solely in the Aged Care sector in more than 50 metropolitan and regional facilities. Jill has also toured care facilities in the US and Africa and is a passionate advocate for both the residents in aged care and the staff who care for them. She researches and writes for DCM Media.

Chris Baynes

DCM Media, agedcare101

Chris has been a journalist and publisher in the retirement village and aged care sectors for 11 years. He has visited over 250 retirement villages and 50 aged care facilities both within Australia and internationally. Chris is a regular speaker at industry conferences plus is a frequent radio commentator.

Annie Donaldson

Nurse and Carer

Annie has a long career in both nursing and the media. She has planned and co-ordinated the medical support from both international TV productions and major stadium events. In recent years she has been a primary family carer plus involved in structured carer support.