Here’s one way to fund a more comfortable retirement

Many assume that by the time you hit retirement, you will have enough savings to fund the lifestyle you have always desired. However, with the rise in living costs and an aging population, this is unfortunately not the case for many Kiwis.

Tightening the belt, taking out another personal loan or credit card, or downsizing to a smaller home might be options for alleviating this financial stress, but they’re not ideal for everyone.

More and more Kiwis are looking to solutions like a reverse mortgage to help them fund a more comfortable retirement. 

What is a reverse mortgage in New Zealand?

A reverse mortgage is like a regular home loan, designed specifically for retirees. It allows those aged over 60 to release the equity in their home to fund a more comfortable retirement without having to sell.

You might be wondering, ‘What can I use a reverse mortgage for?’. Reverse mortgages can be used for many purposes, such as debt consolidation, living expenses, home improvements, helping family, medical costs, aged care or purchasing a new car.

The range of flexible drawdown options also means you can tailor the loan to suit your needs. You can choose to receive funds from your reverse mortgage as a lump sum, regular advances for up to 10 years, a cash reserve facility (like a ‘line of credit’), or a combination of all three.

Adding to the flexibility of a reverse mortgage, making regular loan repayments is not necessary. However, you are free to do so at any time.

Interest is added to the loan each month until you leave your home. The loan, including interest, only becomes repayable when you sell your property, move into long-term care, or pass away.

How much you can borrow with your reverse mortgage depends on several factors, such as your age and the value of your home. Calculate how much you could access.

A reverse mortgage also allows you to live in your home for as long as you wish, so you benefit from any potential increase in property values. Importantly, you always retain ownership of your home.

If you would like to find out more, get in touch with the Heartland Reverse Mortgage team. We’ve helped more than 17,000 customers release equity from their homes to live a more comfortable retirement.

You can also request your free no-obligation Reverse Mortgage Guide here.

Please note the information set in this article may change from time to time. Every situation is different – this information has been prepared without taking into account your needs, objectives, or financial situation. If you are considering a reverse mortgage, we encourage you to understand how it may affect your personal circumstances – talk to friends and family, speak to professionals, and use the resources and tools Heartland has available. Subject to complying with the terms and conditions of your loan, you will not owe more than the net sale proceeds of your home and you can keep your home for as long as you choose. There is no assurance that property values will increase over time, and property values may also decline. Applications are subject to loan approval criteria. Terms, conditions, fees and charges apply.