All Home Equity Release Options in New Zealand

Clear guide to every way you can access your home equity in retirement

Quick Comparison: All Options at a Glance

Option	Keep Home?	Monthly Payments?	Suited For
Reverse Mortgage	✓ Yes	✗ No	Staying in home long-term
Home Reversion	✓ Yes	✗ No	Debt-free solution seekers
Home Equity Loan	✓ Yes	✓ Yes	Those with regular income
Downsizing	✗ No	✗ No	Ready to move anyway
Shared Equity	✓ Yes	Varies	Limited availability
Rental Income	✓ Yes	✗ No	Large homes, shared living OK
Family Loan	✓ Yes	Flexible	Strong family relationships
Government Support	✓ Yes	✗ No	Low income, specific needs

1. Reverse Mortgage

Borrow against your home's value without making monthly repayments. Interest compounds over time until the loan is repaid when you sell, pass away, or move to care.

Pros

• Retain full home ownership
• No monthly payments required
• Typically access 20-65% of home value (varies by lender)
• Lifetime occupancy (contractual right)
• No negative equity guarantee
• Can make voluntary payments

Cons

• Interest compounds over time
• Debt can grow significantly (15-20 years)
• Reduces inheritance substantially
• Interest rates 6-8.5% p.a. (illustrative)
• Minimum age requirement (60+)
• Upfront fees typically $3,000-$6,000 (figures vary by lender)

Suited for: Homeowners 60+ who want to stay in their home long-term and don't have regular income for loan repayments.

Learn more about reverse mortgages →

2. Home Reversion

Sell a percentage share (typically 20-50%) of your home to a reversion company for a lump sum. You retain lifetime rent-free occupancy and share in future property value growth.

Pros

• No debt created (not a loan)
• No interest charges or compounding
• Predictable cost structure
• Still benefit from property growth
• Lifetime occupancy (contractual right)
• No monthly payments

Cons

• Typically receive 40-60% of share's value
• Lose percentage of future growth
• Fewer providers in NZ
• Usually access less cash upfront
• Can't easily buy back share
• Complex inheritance implications

Suited for: People who hate debt, want predictable costs, and plan to stay in their home 20+ years where compound interest would be devastating.

Learn more about home reversion →

3. Home Equity Loan (Traditional Second Mortgage)

A standard loan secured against your property equity. You borrow a lump sum and make monthly principal and interest repayments over a set term (typically 10-30 years).

Pros

• Typically lower interest rates (indicative 5-7% vs 6-8.5%)
• Debt doesn't compound
• Typically access up to 80% of equity (varies by lender)
• Retain full home ownership
• More provider options
• Can repay and re-borrow

Cons

• Requires regular income
• Monthly repayments typically $500-$2,000+
• Must pass affordability tests
• Risk of default and repossession
• Not suitable for pension-only income
• No age-based advantages

Suited for: Retirees with regular income (rental properties, part-time work, substantial pension) who can afford monthly repayments and want to avoid compound interest.

4. Downsizing / Selling Your Home

Sell your current home and purchase a smaller, less expensive property. The difference between sale and purchase prices provides cash while you maintain homeownership.

Pros

• No debt or interest charges
• Access substantial cash (often $200k-$500k)
• Lower ongoing costs (rates, insurance, maintenance)
• Smaller home = easier upkeep
• Fresh start, new location options
• Preserve wealth for inheritance

Cons

• Must leave your current home
• Emotional attachment to property/neighborhood
• Moving costs (typically $10,000-$20,000+)
• Real estate fees (typically 2-3% + marketing)
• Stress of moving and adjustment
• Suitable smaller homes limited

Suited for: People ready to move anyway, those struggling with home maintenance, or when you need maximum cash and want to avoid any debt or interest charges.

5. Shared Equity Schemes

Government or private schemes where an organization takes an equity share in your home in exchange for cash. Very limited availability in NZ for existing homeowners.

Availability Note: Shared equity schemes in New Zealand are primarily designed for first-home buyers, not existing homeowners. Options for seniors are extremely limited. HomeChoice NZ offers limited programs in some regions.

Pros

• May offer better terms than commercial options
• Can share future property growth
• Sometimes income-based eligibility
• Retain homeownership

Cons

• Very limited availability in NZ
• Strict eligibility criteria
• Long waiting lists when available
• Usually income and asset tested
• May have restrictions on property use

Suited for: Low-income homeowners who qualify for specific programs. Worth investigating if you meet low-income criteria, but don't rely on availability.

6. Rental Income from Your Home

Generate income by renting out part of your home, a separate unit, or converting a garage/sleepout into rental accommodation.

Pros

• Regular ongoing income stream
• Retain full home ownership
• No debt created
• Can provide companionship/security
• May get Accommodation Supplement (boarder)
• Potential $250-$400+ weekly income

Cons

• Loss of privacy and space
• Tenant management responsibilities
• Rental income is taxable
• May affect pension entitlements
• Requires suitable space/configuration
• Tenancy laws and obligations

Suited for: People with large homes, separate units, or space to convert. Suitable for those comfortable with shared living and needing regular income rather than lump sum.

7. Family Loan or Gifting Arrangements

Your children or family members provide funds now as an advance on their future inheritance, either as a gift or loan to be repaid from your estate.

Pros

• No commercial lender fees or interest
• Flexible repayment terms
• Keep wealth in the family
• Can preserve more inheritance
• Avoid external debt
• Family may benefit from gifting allowances

Cons

• Can strain family relationships
• Not everyone has financial capacity
• Potential conflicts if multiple siblings
• Gifting within 5 years affects rest home subsidy
• Tax implications for family members
• Requires legal agreements for protection

Suited for: Strong family relationships where children have financial capacity and everyone agrees on the arrangement. Always formalize with proper legal documentation to avoid future disputes.

8. Government Support Programs

Various government assistance programs for low-income homeowners needing help with specific issues like insulation, heating, repairs, or rates.

Available Programs:

• Warmer Kiwi Homes: Subsidies for insulation and heating (indicative — up to around $9,000 for over-65s; check current criteria)
• Rates Rebate Scheme: Up to around $700 annual rates rebate for low-income homeowners (indicative; amount changes annually)
• Weatherization Assistance: Help with weathertightness and heating for eligible homeowners
• Home Repair Assistance: Some councils offer low-interest loans for essential repairs
• SuperGold Card Discounts: Various utilities and service discounts

Pros

• Free money or low-interest loans
• No repayment required for grants
• Targeted at those most in need
• Can significantly reduce costs

Cons

• Strict income and asset limits
• Limited to specific purposes
• Usually small amounts only
• Application processes can be complex
• Not suitable for major cash needs

Suited for: Low-income homeowners needing help with specific costs like insulation, rates, or heating. Check eligibility with Work and Income NZ (WINZ) and your local council.

Which Option is Right for You?

If you want to stay in your home and have NO regular income:

→ Reverse Mortgage or Home Reversion

If you want to stay in your home and CAN afford monthly payments:

→ Home Equity Loan (lower interest, no compounding)

If you're ready to move and want maximum cash with NO debt:

→ Downsize to a smaller property

If you want income (not lump sum) and have extra space:

→ Rental Income from boarders or separate unit

If you have supportive, financially capable family:

→ Consider Family Loan (keep costs in family)

If you're low income with specific needs (insulation, rates, repairs):

→ Check Government Support Programs first

Need Help Choosing?

Our experienced advisers can assess your situation and recommend a well-suited option for your specific circumstances.

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