11 September 2019

Have you considered a Home Equity Release?

We know 40% of all retirees own their own home and rely on New Zealand Superannuation (NZ Super) as their principal source of retirement income, however it is widely recognised that NZ Super struggles to meet fundamental living expenses in retirement . As a result, many retirees are thinking about the equity in their house and how they can leverage this to improve retirement. In fact, Retirees are not just thinking about it, it is being recommended by the Commission for Financial Capability on

They discuss two main equity options:

  • Downsizing
  • Reverse Mortgage

A traditional Reverse Mortgage provides a lump sum payment with no repayment needed until you sell your home. They are a practical solution and for many are the only way to make a large capital purchase in retirement or simply free up home equity to enjoy a better income in retirement.

The problem is deferring the interest payments until the home is sold creates a substantial debt. For example, if you borrow $100,000.00 at age 65 you could owe as much as $330,000.00 by the time you reach age 80, which accelerates to be as much as $493,000.00 by age 85.

So, at Lifetime we have set ourselves a challenge. Can we identify a way to improve the Reverse Mortgage product to help retired people access their home equity without incurring such substantial debt?

Equitable release of home equity is a problem that must be solved, the opportunity to provide the retired community with as options as possible to provide a reliable and stable retirement income is stand out.

We know there is a better answer to home equity release and are excited to track down the answer.

Lifetime is considering a Home Equity Release whereby:

  • The retired homeowner sells up to 45% of the equity in their home in exchange for a guaranteed fortnightly income for life
  • The homeowner will always own a minimum of 55% equity in their home, and absolutely no interest will be charged.
  • When the home is sold the homeowner will receive a minimum of 55% equity in their house, and continue to receive an income for life for the rest of their life.

As we work through the challenge, we need your help, if you have a couple of minutes to complete this simple survey, it will help us to understand how you feel about using your home equity in retirement.