A Moneybren tool

NZ REVERSE MORTGAGE CALCULATOR

A reverse mortgage lets New Zealanders aged 60+ borrow against the family home with no repayments — the interest compounds instead. This shows what the debt becomes, what the house becomes, and what’s left for you or your family.

Your situation

Age of youngest borrower yrs

Home value $

Amount to borrow $

Interest rate % pa

Heartland’s variable rate as at early 2026 — always check the current rate. Interest compounds monthly.

House price growth % pa

Long-run NZ average is roughly 3–5% — use a conservative number.

Show me at age yrs

At age 85 you would owe

The debt vs the house

Year-by-year detail

Age	Loan balance	Home value	Your equity	Equity share

Read this with your family. No repayments means the interest is borrowed too — the debt compounds monthly and only ever grows. Both New Zealand providers (Heartland Bank and SBS Bank) include a no negative equity guarantee: you can never owe more than the house sells for, and you keep the home for life. Your NZ Super is not affected, but supplementary benefits and the residential care subsidy can be — check with Work and Income first. Independent legal advice is required before signing, which is a feature, not a hurdle. Before borrowing, price the alternatives honestly: downsizing, a family arrangement, or borrowing less now and topping up later (interest is only charged on what you’ve drawn). With only two providers in NZ, compare both.

How to use this calculator

Enter the age of the youngest borrower, your home’s value, and how much you’d like to borrow. The calculator compounds the debt monthly at the interest rate, grows the house at your assumed rate, and shows the equity left at any age you pick.

Try it with zero house price growth too. The comfortable projections all lean on the house growing — see what the picture looks like if it doesn’t.

This is a tool only, and none of the information it produces is financial advice. Its accuracy is not guaranteed. Always check your own figures and get advice from your own financial professionals before making decisions.

A worked example

Say you’re 70, your home is worth $900,000 mortgage-free, and you borrow $100,000 against it to top up your retirement – with no repayments to make.

Sounds great, and for the right person it can be. But here’s what the calculator lays bare: because you’re not making repayments, the interest gets added to the loan and then charged interest itself. At typical reverse mortgage rates, the debt roughly doubles every decade or so.

So that $100,000 borrowed at 70 could be $200,000 owing by 80, and $400,000 by 90 – steadily eating into the equity you’d otherwise leave behind. Run your own numbers above and see how the debt grows over time.

What most people get wrong about reverse mortgages

With a normal mortgage, compounding is quietly working against you. With a reverse mortgage, it’s working against you and pointed at your biggest asset – because you’re not paying anything down, the debt only ever grows, and it grows on itself.

That’s not a reason to write them off. For a retiree who’s asset-rich but cash-poor – plenty of house, not enough income – a reverse mortgage can genuinely improve their quality of life, and in New Zealand the reputable lenders carry a “no negative equity guarantee,” so you can’t end up owing more than your home is worth.

But this is one to go into with your eyes fully open. The debt can consume a large chunk of your estate, which matters if leaving something behind is important to you or your family. Talk to your family, and get independent legal and financial advice before signing anything – this is exactly the kind of decision where a professional in your corner pays for itself.

This calculator and page are general information only and not financial advice. Everyone’s circumstances will vary – always do your own research and consult your own financial professionals before making decisions.