Australia
When a parent, partner or loved one suddenly needs more care, the first concern is usually their wellbeing.
Can Mum or Dad remain safely at home? Do they need more support? Or has the time come to consider residential aged care?
Then another question can arrive very quickly:
How are we going to fund this?
For many families, the problem isn't that their loved one has no assets. It is that much of their wealth may be tied up in the family home rather than sitting in the bank.
If your parent or loved one owns a home and needs help funding their aged care accommodation, care at home or ongoing living expenses, there may be funding options available.
You may not need to immediately sell the family home. You also don't need to understand RADs, DAPs, reverse mortgages or specialist aged care lending before asking for help.
The first step is a conversation
Tell us:
- What is happening
- What care is required
- What needs to be paid
- When it needs to be paid
- Whether your loved one owns property
- What other funds or resources may be available
From there, Key Choice Lending can help assess the lending options that may be available and explain how they work.
Trusted since 2001 · Multi award-winning finance brokerage · Credit Representative 508009 authorised under Australian Credit Licence 538623
The aged care system can be complicated. We can simplify the finance part.
If Mum or Dad wants to remain at home
For many older Australians, the preferred outcome is to remain in their own home for as long as it remains safe and practical.
The Australian Government's Support at Home program can assist eligible older Australians with services including personal care, nursing, allied health, meals, transport, assistive technology and home modifications.
For someone entering the aged care system, the usual starting point is to apply for a My Aged Care assessment.
Government assistance does not necessarily mean every cost will be covered.
Depending on the person's assessment, financial circumstances and the services required, personal contributions may apply. My Aged Care provides information about Support at Home costs and contributions as well as a Support at Home fee estimator.
Families may also want or need services beyond the available government-funded support. This could include:
- Additional private care
- More frequent assistance
- Modifications to make the home safer
- Mobility or other equipment
- Domestic support
- Transport
- Medical or personal expenses
- Other costs that help a loved one remain safely at home
If your parent owns their home but has limited readily available cash or income, accessing some of the equity in the property may be one funding option worth considering.
That doesn't automatically mean taking out a reverse mortgage. And it certainly doesn't automatically mean selling the home.
The first step is understanding the need and the funding gap.
If a reverse mortgage is something you'd like to understand better before your conversation with us, our guide How a Reverse Mortgage Works in Australia explains the mechanics, costs and protections in plain language.
What happens if residential aged care is needed?
When remaining at home is no longer practical or safe, residential aged care introduces a different set of financial decisions.
The amount a person contributes towards their care can depend on their financial circumstances, income, assets, accommodation and the applicable aged care rules.
My Aged Care explains the current aged care home costs and fees and also provides an Aged Care Home Fee Estimator.
One of the biggest financial decisions for many families is how the accommodation will be funded.
Families may also be able to pay part of the accommodation amount as a RAD and pay a DAP on the remaining balance.
The rules changed for some people entering residential aged care from 1 November 2025, including retention deductions applying to certain RAD and RAC balances. The Australian Government provides current information about RAD and RAC retention.
This is why families should work from the current rules rather than rely on an older understanding of how a RAD works.
Does Mum or Dad's home have to be sold?
Not necessarily. This is one of the most important questions to ask before making a major property decision.
Consider a simple example (for illustration only).
Mum needs permanent residential aged care. Her preferred room has an accommodation price of $550,000. She has:
- $120,000 in accessible savings
- a mortgage-free home worth approximately $1.1 million
The immediate family reaction may be: “We need to sell Mum's house.”
That may ultimately be the appropriate decision. But it may not be the only option available today.
Before putting the property on the market, the family could investigate whether it may be possible to:
- Pay part of the accommodation cost as a RAD
- Pay a DAP on the remaining amount
- Use a combination of RAD and DAP
- Access available home equity
- Retain the property temporarily
- Potentially rent the property
- Use specialist aged care finance
- Sell the home later after there has been time to make a considered decision
The objective isn't to keep the family home at all costs. It is to understand the alternatives before making a major and potentially irreversible decision under pressure.
It's also worth being aware that the Australian Government offers its own equity release option. Our guide Home Equity Access Scheme: Government's Reverse Mortgage explains how it works and who may be eligible.
How can finance help?
Finance doesn't make aged care free.
What it may provide is another way to fund the care decision — and, in some circumstances, more time and flexibility.
Depending on your loved one's circumstances, property, age, existing debts and lender eligibility, finance may potentially assist with:
- All or part of a RAD
- DAP payments
- Additional care while remaining at home
- Home modifications
- Private care and assistance
- Living expenses
- Other care-related costs
- The period between entering aged care and making a longer-term decision about the family home
For some eligible homeowners, a reverse mortgage may be one option.
A reverse mortgage can allow an eligible homeowner to access some of the equity in their property without making the normal principal-and-interest repayments associated with a conventional home loan.
However, interest generally accumulates over time, which increases the loan balance and can reduce the equity ultimately remaining in the property.
The Australian Government's MoneySmart website also provides independent information about reverse mortgages and home equity release.
There can also be specialist lending arrangements for people who have moved permanently into residential aged care. These are not necessarily the same as a standard reverse mortgage and can have different eligibility requirements, loan terms and repayment conditions.
So the right question isn't simply: “Can Mum get a reverse mortgage?”
A better question is: “What does Mum need, what will it cost, what resources does she have and what are the available ways of funding it?”
For a more detailed look at this specific use case, see our article Using a Reverse Mortgage to Fund Aged Care Costs.
You may have the money. It just isn't sitting in the bank.
This is the situation many families find themselves dealing with. Mum or Dad may have:
- limited income
- relatively modest savings
- a substantial amount of wealth tied up in their home
They can therefore be asset rich but cash constrained at exactly the time when access to money could improve their care or quality of life.
Selling the property is one way of converting that wealth into cash. Finance may provide another.
Neither answer is automatically right. The important thing is understanding the alternatives before deciding.
Aged care funding can involve a team
Finance is only one part of the aged care decision. Different professionals can help with different questions.
Key Choice Lending — Finance
We can assess available lending options and, where appropriate, arrange finance to help fund aged care costs.
Accredited Aged Care Financial Adviser — Aged Care Strategy
They can help assess aged care fees, government entitlements and the financial implications of different RAD and DAP strategies.
Your Financial Planner — Investments and Superannuation
Your financial planner can consider how the aged care decision interacts with investments, superannuation and your loved one's broader financial position.
Accountant — Tax
An accountant can advise on taxation consequences, including issues associated with retaining, renting or ultimately selling the family home.
Solicitor — Legal
A solicitor may assist with powers of attorney, guardianship, contracts, estate planning and other legal matters.
Key Choice Lending does not replace these advisers. We can work alongside them. The objective is to have the right people dealing with the right questions so the family can make a considered decision.
Start with one conversation
If your parent or loved one owns a home and needs help funding their accommodation, care or living expenses, you don't need to solve the entire aged care system before contacting us.
Start with four simple questions:
- What care is required?
- What needs to be paid?
- When does it need to be paid?
- What property and other resources are available?
From there, Key Choice Lending can assess whether suitable funding options may exist and explain what they involve.
If genuine financial hardship means a person cannot afford their required aged care costs, My Aged Care financial hardship assistance may also be available.
The aged care system can be complicated. The funding conversation doesn't have to be.
Our role is to help families understand the finance behind the care decision — what needs to be paid, when it needs to be paid and what funding options may be available.
We can then work alongside your loved one's aged care adviser, financial planner, accountant, solicitor and care provider.
Because ultimately this isn't about a loan. It is about helping your loved one access the care they need and enjoy the best quality of life possible, while giving the family the opportunity to make considered financial decisions rather than rushed ones.
How are we going to fund this? Start with a conversation.
About Key Choice Lending
Trusted since 2001, Key Choice Lending is a multi award-winning Australian finance brokerage.
We help families investigate lending options for aged care, including funding for care at home, residential aged care accommodation and other eligible needs.
Credit Representative 508009 is authorised under Australian Credit Licence 538623 (Key Choice Group Pty Ltd, ABN 27 106 387 786).
General Information Disclaimer
The information contained in this article is general information only and does not constitute financial, legal, taxation or aged care financial advice. It does not take into account your personal objectives, financial situation or needs. Lending products, eligibility, interest rates, fees and lending criteria vary and are subject to change. Consider whether the information is appropriate for your circumstances and obtain independent financial, aged care, legal and taxation advice where appropriate.
