Equity Release vs Downsize Calculator

This calculator compares two ways for older New Zealanders to turn home equity into money to live on: releasing equity with a reverse mortgage while staying put, or downsizing to a cheaper home and pocketing the difference. Both unlock the wealth tied up in a house, which for many retirees is their largest asset, but they cost very differently. A reverse mortgage lets you stay in the home you love and borrow against it, with no repayments, but the interest is added to the loan and compounds year after year, so the debt grows steadily and eats into the equity left for you or your estate. Downsizing has a one-off cost, the agent commission, legal fees and moving expenses of selling and buying, but no ongoing interest, so over a long period it is usually far cheaper in dollar terms; the price is leaving your home and community. You enter the amount of equity you want to free, the reverse mortgage interest rate, the years you would hold it, and the transaction costs of downsizing, and the calculator shows the interest a reverse mortgage would accrue over that time against the one-off downsizing cost, and the difference. Use it to weigh cost against the value of staying put. This is a simplified comparison and general information, not advice.

Reverse mortgage interest compounds with no repayments; downsizing is a one-off cost but means moving. Simplified, excludes fees and price differences. General information only.