What a reverse mortgage does
A reverse mortgage uses home equity as security and may provide a lump sum, regular payments, or another agreed facility without the same regular principal repayments as a standard mortgage. Eligibility, age, property, and loan limits are provider-specific.
Why the balance can grow
Interest and fees may be added to the balance while repayments are deferred. Over time, a growing loan can reduce remaining equity, particularly if the interest rate, term, or property value changes.
Check control and obligations
Ask about continued occupancy, maintenance, rates, insurance, moving into care, renting the property, partners or family members, repayment triggers, and what happens when the home is sold.
Consider the estate and alternatives
The decision can affect the equity available to an estate and future housing choices. Compare downsizing, a standard top-up if repayments are affordable, public or family support, and other retirement-income options with independent advice.
Use independent review
This is a complex, high-impact decision. Read the disclosure and contract, ask how the balance changes under different assumptions, and obtain independent legal and financial advice before signing.
Evidence categories to organise
- Loan purpose and amount
- Interest and fee treatment
- Occupancy and maintenance obligations
- Property and valuation assumptions
- Repayment or sale triggers
- Estate and whānau discussion
- Independent legal and financial advice
This guide is general information only. MoreGage does not provide regulated financial advice, a lending assessment, approval, or an offer.