How much can you borrow with a reverse mortgage in NZ?

The amount you can borrow with a reverse mortgage comes down to a few things, mainly your age and what your home is worth. This post explains them in plain English. It is general information, not advice. For the basics, read our reverse mortgage guide.

Age is the biggest factor

Reverse mortgages are typically for homeowners aged 60 and over, and the older you are, the more you can typically borrow. Lenders usually set a maximum share of your home's value that rises with age.

Lenders look at the age of the youngest borrower. For couples with an age gap, the younger partner sets the limit.

Your home's value

The limit is a share of your home's value, so a higher value means a higher dollar amount. Lenders arrange a valuation. Some locations and property types are restricted, and homes generally need to be conventionally built and in good repair.

Any existing mortgage

A reverse mortgage usually has to be the only mortgage on the home. If you still owe a little, it's paid off from the reverse mortgage first, which reduces what's left for you.

How you take the money

You can usually take a lump sum, a reserve to draw on later, regular payments, or a mix. Because interest is added to the loan and compounds, borrowing only what you need now can leave more room to borrow later. Taking the maximum at the start may mean you can't borrow more down the track.

Other things that can change the amount

• Keeping some equity. Some lenders let you set aside a share of your home's value to keep. That lowers the maximum you can borrow.
• Fees and rates. Set-up and valuation fees are often taken from the loan. Interest rates and fees change often, so check current rates with the lender.
• Your lawyer. You'll commonly need independent legal advice before signing, at your own cost.

Find out your figure

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FAQ

What is the maximum you can borrow with a reverse mortgage in NZ?

It's a share of your home's value that rises with age. Lenders set their own limits, and the maximum is usually reached only at older ages.

Does my partner's age matter?

Yes. Lenders base the limit on the youngest borrower, so a younger partner usually lowers the amount you can borrow.

Can I borrow more later?

Often, yes. Lenders may consider a further advance based on your age, your home's value and the loan balance at the time. A new valuation and fees usually apply.