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90% want to grow old in their own home

A new survey explains the growing popularity of reverse mortgages.

15 February 2022

An overwhelming number of older Kiwis would prefer to stay in their own homes in retirement, a new survey shows.

Nearly 90 per cent of people 50-plus who responded to a survey run by lifestyle website www.GrownUps.co.nz said they felt it was ‘important’ or ‘very important’ to age in place, says Heartland Bank’s general manager of reverse mortgages, Andrew Ford.

The results of the survey backed up the bank’s own findings, says Ford.

“We’ve been seeing anecdotal evidence for years that our customers are wanting to retire in the comfort of their own homes,” he says.

“This survey has confirmed that ageing from home is becoming a more popular option, despite the challenges that can come with it for people who have most of their wealth locked up in their property.”

Ford says the bank has seen a big increase in demand for its reverse mortgages, which allow homeowners to redraw some of the equity in their homes while still living in the property.

The survey asked more than 2,000 Kiwis aged over 50 for their thoughts on a range of topics, including home ownership, retirement, NZ Super, reverse mortgages and more.

Results also revealed that only 12.3 per cent of respondents feel that NZ Super on its own will be enough to fund the retirement they desire.

It seems that for many retirees, limited superannuation and the rising cost of living is restricting their ability to comfortably age in place.

Worldwide trend

The popularity of reverse mortgages is growing worldwide.

Ford points to international research published by EY, which predicts that the global equity release market could more than triple over the next decade.

According to the Global Equity Release Roundtable 2020 survey report, which analyses information from market leaders across the world (including Heartland Reverse Mortgages), the growth potential of this market is huge.

Over US$15b of equity is currently released per year globally, and by 2031 this is expected to surpass US$50b annually.

He says reverse mortgage enquiry levels in 2021 were up 65 per cent on those the previous year, showing that more Kiwis are becoming aware of the potential benefits of a reverse mortgage.

“Higher livings costs are forcing retired homeowners to consider options to maintain their lifestyle,” explains Ford.

“A Heartland Reverse Mortgage can enable them to live the retirement they desire while staying in their home.”

About reverse mortgages

To find out more, watch this video from Heartland Bank, New Zealand's largest provider of reverse mortgages:

A reverse mortgage is a loan that has been designed specifically for retirees, to help them live a more comfortable retirement.

Heartland has a thorough application process to ensure customers make an informed decision and offers considerable protection including a lifetime occupancy guarantee and a no negative equity guarantee.

There is no requirement for regular repayments (although customers are free to make them at any time), with interest added to the loan monthly.

The loan is repaid when the last nominated resident permanently moves out of the home. This is normally when the property is sold and the owners downsize, move into care or pass away.

For more information, visit www.heartland.co.nz.

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