Mortgages, Refinancing, Borrowing & Guarantees

A reverse mortgage (also called home equity release) lets homeowners — generally aged 60 or over — borrow against the equity in their home while continuing to own it and live in it. You can take the money as a lump sum, as regular payments, or as a facility you draw on when needed.

The key difference from a normal mortgage: you make no regular repayments. Instead, interest is added to the loan and compounds over time. The loan — plus all the accumulated interest — is repaid when you sell the home, move into long-term care, or pass away.

Reverse mortgages are on floating interest rates, typically higher than standard home loan rates. Because the interest compounds and nothing is being repaid, the balance grows faster than most people expect — which is why careful advice matters before you commit.

Reputable New Zealand reverse mortgage lenders offer important protections. Before you sign, make sure your loan includes:

• A no negative equity guarantee — you (or your estate) will never have to repay more than your home sells for, even if the loan balance grows beyond the home's value. The lender cannot claim your other assets.
• A lifetime occupancy guarantee — the right to live in your home for as long as you choose. Take care: this protects only the people named on the loan. If a spouse, partner or family member living with you isn't named, their right to stay if you die or move into care needs to be addressed before you sign — this is one of the most important things we check.
• An equity protection option — some lenders let you ring-fence a percentage of your home's value so it's preserved for your estate no matter what.
• Access to an independent complaints process — such as the Banking Ombudsman scheme.

A reverse mortgage is the right tool for some people and the wrong one for others. Before committing:

• Understand the compounding effect — with no repayments, the balance can double in a decade or so at typical rates. The equity left for you or your estate reduces accordingly, and faster if house prices are flat.
• Talk to your family — the loan directly affects what you leave behind. An open conversation now prevents painful surprises later.
• Consider the alternatives first — downsizing to a smaller home, renting out part of your property, financial help from family, or your council's rates postponement scheme may meet the need at far lower cost. Our guide to deciding whether to sell your property works through some of these options.
• Get independent financial advice too — a reverse mortgage can interact with your wider retirement planning, benefits and future care arrangements. Legal advice and financial advice answer different questions; for a decision this significant, you deserve both.
• Borrow only what you need, when you need it — a drawdown facility means interest compounds only on what you've actually used.

New Zealand reverse mortgage lenders require you to receive independent legal advice before the loan is finalised — and for good reason. This is exactly the advice we provide. We will:

• Explain, in plain English, how the loan works, how the interest compounds, and what it means for your equity over time;
• Check the no negative equity, lifetime occupancy and any equity protection provisions in the actual loan documents — not just the brochure;
• Make sure everyone who should be named on the loan is named, so no one's right to stay in the home is at risk;
• Explain your ongoing obligations — such as keeping the home insured and maintained and paying the rates — and what happens if they're not met; and
• Handle the legal work: certifying the documents, registering the mortgage, and discharging any existing mortgage being repaid from the loan.

Our advice is independent — we act for you, not the lender. If something in the documents isn't right for your situation, we'll tell you plainly before you sign.