Rates Postponement vs Reverse Mortgage Calculator

This calculator compares two ways an older New Zealand homeowner can fund an ongoing cost like council rates without dipping into savings: postponing the rates through the council, or drawing the same amount each year from a reverse mortgage. Both let you stay in your home and tap its equity rather than paying cash now, and both build up a debt that is repaid when the home is eventually sold or the estate is settled, reducing what is left over. The difference is the interest rate. Council rates postponement usually charges interest at a relatively modest council rate plus a small administration fee, while a reverse mortgage typically charges a higher rate, so for funding the same yearly amount the reverse mortgage debt grows faster. You enter the annual amount you want to cover, the postponement interest rate, the reverse mortgage interest rate, and the number of years, and the calculator compounds each year's draw and shows the total owed under each option and the difference between them. Use it to see how much the gap matters over five, ten or twenty years. This is a simplified comparison that ignores fees and rate changes, and eligibility rules apply to both, so confirm the current terms with your council and a reverse mortgage lender. Estimate only, not financial advice.

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Simplified; ignores fees and rate changes. Both reduce the equity left in your home. Eligibility applies. Confirm terms with your council and lender. Estimate only.