Reverse Mortgage Calculator NZ 2026
This calculator shows you how a reverse mortgage in New Zealand grows over time and what it does to the equity left in your home. Because a reverse mortgage has no regular repayments, interest is added to the loan balance each year and then itself earns interest, so the debt compounds while your home's value moves independently. You enter your current property value, the initial loan amount you plan to draw down, your age, the interest rate charged, and the annual rate you expect your property to appreciate. The calculator projects your loan balance, property value, remaining equity and loan-to-value ratio (LVR) at year 1 through 10, then 12, 15, 20 and 25, alongside your age at each milestone, so you can see when compounding erodes your equity. It also flags the initial LVR as you type and warns you if the loan balance is forecast to overtake your property's value, in which case New Zealand's no negative equity guarantee means you would never owe more than the home is worth, though remaining equity would fall to zero. Use this before drawing down a reverse mortgage to test different interest rates, borrowing amounts and growth assumptions, and see how much equity you and your estate are likely to keep. These are indicative projections only, not financial advice, and actual outcomes depend on your provider's terms and real market movements.
How does a reverse mortgage work in New Zealand?
A reverse mortgage lets homeowners aged 60 or over borrow against the equity in their home without selling it or making regular repayments. The loan plus compound interest is repaid when the home is sold, the borrower moves into long-term care, or the borrower passes away. The main provider in New Zealand is Heartland Bank, which offers reverse mortgages under their Heartland Seniors Finance brand.
How much can I borrow?
The maximum loan amount under a NZ reverse mortgage depends on your age. Younger borrowers can access less of their equity because the loan has longer to compound. Typical maximum LVR (loan-to-value ratios) range from around 15-20% at age 60 to 40-50% at age 80 and above. The loan is structured so that you retain a guaranteed minimum equity position (usually at least a 10-15% equity protection) even if property values fall.
The compound interest effect
Because no repayments are made, interest is added to the loan balance each month and future interest is then charged on the growing balance. This compounding effect means the loan can grow substantially over time. A $150,000 loan at 9.5% interest doubles in approximately 7.6 years, all else being equal. This is why this calculator is important: seeing the long-run trajectory helps homeowners and their families make an informed decision about whether, when, and how much to borrow via a reverse mortgage.
Reverse mortgages are regulated under the Credit Contracts and Consumer Finance Act 2003. For independent advice, speak with a registered financial adviser before proceeding.