Retirement Funding · Updated October 2026
Retire and Downsize Without a Mortgage
Many Australians approaching retirement are asset-rich and cash-poor: a home worth a tidy sum, but not enough income to live the way they want.
Downsizing and reverse mortgages are the obvious answers. They are not the only ones.
Asset-Rich, Cash-Poor
More older Australians are carrying mortgage debt into retirement. Research for the Australian Housing and Urban Research Institute (AHURI) found that average real mortgage debt among owners aged 55 and over rose by around 600% between 1987 and 2015. See AHURI Final Report 319.
When income drops at retirement, that debt, and the equity locked up in the home, start to matter a great deal.
Make the Move Pay
Selling the family home and buying something smaller can free up cash. But often the home you want to retire into costs about the same as the one you are selling, and there are selling costs (agent fees and marketing) and buying costs (stamp duty) on top.
The better question is: how do you come out of the move with more? Usually that means:
- working out the best strategy to add value to your home before you sell;
- keeping the selling agent working hard for you, not just for their commission;
- finding and negotiating well on the home you move into.
“Why just sell the family home when there may be better options you have not considered?”
Stephen Lazar, properT network
The Pension, Super and Your Home
Two rules worth knowing in 2026:
- Your home is exempt from the Age Pension assets test, but cash and super are assessed. Releasing equity can affect your pension, so get advice on the whole picture.
- Sale proceeds set aside to buy or build your next home can be exempt for up to 24 months (sales from 1 January 2023), and are deemed at the lower rate. See Services Australia.
- Downsizer contribution: from age 55, up to $300,000 each from the sale can go into super. See Super benefits for downsizers.
If you want to stay put, a reverse mortgage or the Government’s Home Equity Access Scheme can release equity without selling, but the debt grows over time. Read the fine print first: reverse mortgage or equity release?.
Bring the Right Team Together
Your accountant can check the numbers but cannot give financial planning advice. A financial planner can advise on super and investments but usually not on property. Your local agent wants the listing. Friends mean well.
We know property and how the numbers work. We share knowledge, not personal financial advice: we show you the options for your home, help you test them with your accountant and adviser, and then help you carry out the plan.
No obligation
Want to Retire Without a Mortgage?
Share where you are now and where you want to be. We will look at your home and show you which options could get you there.
Prefer to call? 0413 108 125
Sources: AHURI: Mortgage stress and precarious home ownership (Final Report 319); Services Australia: Real estate assets; ATO: Downsizer super contributions. General information only, current as at October 2026. Rules change: confirm your position with a licensed adviser.
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