What is a 'Lifetime Loan'?

A Home Equity Release product (or Reverse Annuity Mortgage as they are sometimes called) is available to New Zealand Seniors, and may provide a way to help fund your retirement. A Lifetime Loan is available to Seniors, aged over 60 years, who are homeowners. A percentage of the equity in the home is released as a cash lump-sum, with no repayments required until the end of the loan. Between 15-45% of the value of the property can be borrowed, dependent on age, and the loan remains in place until you move from the home, enter long-term care, or pass away.

Why would you choose a ‘Lifetime Loan’?

It can help to make life in retirement a lot more fun. The most common reasons for taking out a Lifetime Loan include:- taking an overseas holiday; buying a new car; home improvements; medical treatment, or simply to provide for day to day expenses.

This enables retirees to continue to live in the manner they have been accustomed to during their working life. The Lifetime Loan can even be used to pay off an existing mortgage, avoiding monthly repayments that can be a struggle on a low, fixed income.

There may also be notable emotional benefits. Homeowners are able to ‘age-in-place’, allowing you to remain in a familiar environment and neighbourhood, where there may be emotional ties, and significant support structures. You also avoid the stress of selling and searching for a new home, and the associated costs.

Whether this could be an option for you or a member of your family, the decision to take out a Lifetime Loan should be discussed with your Oliver Mortgage Services broker and of course a solicitor.