Toyota previa over heating

Check coolant level; check thermostat status; check temp sensor and fan relay/fuse.

In the USA the Estima is called Previa, and there may be some differences, depending on whether it has the 2.4L or a 2.2L engine or other options.
Labor Time for this job is One hour.
The water pump on the 2.4 Liter engine is accessed under the vehicle, very likely the same on any engine for these models.
Follow the radiator hoses to the engine until you find the water pump, which is near one of the drive axles.
The thermostat is bolted to the water pump with two bolts.
Drain the cooling system, then using a large pan under to catch any extra coolant when removing the thermostat housing.
Carefully clean the surfaces of both the thermostat housing and the water pump. [Check water pump for coolant seepage, which leaves a crusty beige or pink deposit. If so, replace the water pump.]

Install a new thermostat and gasket (Or O-ring).
Refill the coolant with the same coolant only if it looks clean.
I would also test the coolant to see what the PH is, which needs to be about 7.2 PH. (Coolant will turn acid over time, even when it looks okay.)
Make sure you put as much coolant back into the system as you removed.
Fully warm up the engine, and let it cool down before removing the radiator cap, then check for air in the system, topping up as needed.
The radiator needs to be full to the top.
Also check the overflow reservoir, which has level marks of Low and High, Never fill over the High mark.

Check antifreeze,coolant,thermostat could be seized controls when engine is hot for heat

A thermostat that is stuck open will cause that. Drain the coolant and change thermostats.

You could have a pin hole in your hose or in your radiator.

fan doesnt come on ????
thermostat upside down ?

bad temp sensor for fan

You may need to replace your thermostat or heating coil.

Thermostat, coolant sensor, fan relay etc. First check the coolant level, check for leaks. Check if the fans are on when the engine is hot, about to over heat. If equipped with two fans they both should be on. If its all good have the system flushed and a new thermostat installed. If you want to change the thermostat yourself follow the big hoses that are attached to the radiator. Look at each where they attach to the engine. It should be apparent where the thermostat is at the end of the hose. After replacing the thermostat if you don't top off the coolant and there is air in the system the car will over-heat with the new thermostat. Some times radiators have air bleed valves on top. If not then jack up the car a little. Jack it up in the side the radiator cap is at so the air can work its way out. To fill it add coolant when the car is cold, off, and jacked up. Leave the cap off and start the car this is so the thermostat opens and the coolant flows. Continue to add coolant until it over-flows close or put the cap on. Put coolant in the over flow reservoir fill it to the low level. If the radiator has the air valve you don't need to jack the car. If you did it right the car should not over heat and the heater should be working.

Thanks for the quick reply. What you have is a thremostat that is stuck in the "open" position. This would explain why the temp gauge reads low. Also, this condition will also cause the engine to seem like it is "revving up". Why? Because the OverDrive will not engage until the temperature of the coolant is 172 degrees F. When the coolant reaches that temp, the OD solenoid gets power from the ECU, dependant on the temp mentioned above...NOW, when the temp of the coolant DROPS below 172 (as in having a seized open thermostat), the solenoid is de-energized by the ECU, and the trans shifts OUT of OD. Downshifting to the next lower gear cause the RPMs to incerase. In any case, replace the thermostat, and whilst you are doing this, replace the coolant, also. If you have RED coolant, that is factory Toyota coolant. Is is a GOOD IDEA to continue using the red coolant if you already have it in your cooling system. Buy the stat and the coolant at a Toyota dealer. Do NOT buy an "aftermarket" stat. The cheaper ones do NOT have the air "wiggle" valve built into the stat. Install the stat with the little "wiggle valve" pointing straight up; "12 o'clock". Add 50-50 coolant water mix, Bleed the air from the cooling system & you will be fine.

Previa heaters are usually ultra-reliable.
So, regarding your question, the only reason for the temp gauge to drop down with the heater on is the thermostat is sticking open, or you have a lower than recommended thermostat installed. The factory thermostat is a 192 degree F/89 degrees C stat. Down your way, a lot of the parts places vend the "summer" thermostats, and I suspect that this is your problem.
Look to see what the temp degrees that are printed on the stat. Should be 192 F or 89 C. The "summer" stats are 185 F/ 85 C. Also, make sure that your stat has a small "wiggle valve", some aftermarket stats do not have this. Very important. Install the stat with the "wiggle valve" pointing straight up/12 o'clock...
Regarding your trans dropping out od OD, this is because the coolant temp is dropping below 172 degrees F. This is the threshold for the OD to engage. Below 172/no OD engagement.