With rising living costs placing increasing pressure on retirees, Hawkesbury seniors are being urged to carefully compare their options before using the equity in their home to boost their income.

National Seniors Australia is warning that while commercial reverse mortgages can appear attractive, the long-term cost of borrowing can significantly reduce the value of a person's home over time.

A reverse mortgage allows homeowners, generally those of Age Pension age, to borrow against the equity in their property without making regular repayments. Instead, the loan and accumulated interest are usually repaid when the property is sold, the homeowner moves into aged care, or their estate is finalised.

The catch is compound interest.

Current commercial reverse mortgage interest rates range between 7.85 and 9.05 per cent, with some products charging as much as 9.25 per cent.

By comparison, the Australian Government's Home Equity Access Scheme (HEAS) currently charges 3.95 per cent interest, almost half the rate of many commercial products.

That difference can have a dramatic impact over time.

A loan growing at nearly nine per cent a year can erode a homeowner's remaining equity far more quickly than one charged at the government's lower rate, potentially leaving less money for future aged care costs, a surviving partner or beneficiaries.

The Home Equity Access Scheme allows eligible Australians of Age Pension age to access part of the equity in their home through fortnightly payments, lump sums or a combination of both.

Importantly, the government scheme includes a No Negative Equity Guarantee, ensuring borrowers or their estates will never owe more than the value of the property used as security.

Despite these advantages, the scheme remains relatively underused. As of 31 March 2026, more than 19,400 Australians were participating in the program, with an average loan balance of $36,875.

Financial advisers stress that the government scheme is still a loan and interest continues to accumulate over time. It may not suit everyone's circumstances.

National Seniors Australia recommends that anyone considering a reverse mortgage should first investigate the Home Equity Access Scheme, seek independent financial advice and speak with Services Australia's Financial Information Service before making a decision.

For many Hawkesbury residents, the family home represents decades of hard work and is their largest financial asset. Before signing any reverse mortgage agreement, experts say it pays to compare interest rates, understand the long-term costs and explore all available options.

As National Seniors Australia puts it, don't rely solely on information provided by lenders or brokers. Take the time to compare products, ask questions and ensure you fully understand how a reverse mortgage could affect your financial future.