If you ask people what they know about home equity release, many (if not most) would probably mention reverse mortgages. That makes sense, since for a long time they were the only equity release option available to Kiwis. Until we launched Lifetime Home last year.

Equity release actually refers to any financial arrangement that allows homeowners, typically seniors, to access the capital tied up in their property without having to sell up completely and move.

A reverse mortgage is one option, where the homeowner takes out a loan against their property, with repayment of the initial amount plus accrued interest typically deferred until the homeowner moves out or passes away.

The other option is the debt-free model, commonly known as home reversion, which involves the homeowner selling a portion of their property. This is the basis for Lifetime Home, which specialises in providing retirees aged 70 or older with a regular income to help meet day-to-day expenses.

Understandably, we often get asked what makes Lifetime Home different from a reverse mortgage. So, we’ve pulled the key comparisons together in this handy table: