How much equity can you actually unlock from your home? It’s not a one-size-fits-all number. It depends on your age, your property’s value, your location, and even your health. In New Zealand, equity release isn’t as common as in the UK or Australia, but it’s growing-especially among retirees who own their homes but struggle with fixed incomes. If you’re asking this question, you’re likely thinking about turning your biggest asset into usable cash without moving out. Let’s cut through the noise and give you real numbers, real rules, and real options.

What Is Equity Release?

Equity release means borrowing against the value of your home without selling it. You stay in your house, but you access a portion of the money you’ve built up over years of mortgage payments or property growth. Unlike a reverse mortgage in the US, New Zealand doesn’t have a formal government-backed equity release program. But private lenders, including some banks and specialist finance companies, offer products that function similarly.

The most common form here is a home equity loan or line of credit. Some lenders also offer reverse mortgage-style products, where you don’t make monthly repayments and the loan plus interest grows over time. These are usually only available to people over 60.

How Much Equity Do You Have?

To figure out how much you can release, start with your home’s current market value. Then subtract what you still owe on your mortgage. That difference is your equity.

Let’s say your home is worth $850,000 and you still owe $200,000. Your equity is $650,000. But you won’t be able to take out all of it. Lenders cap how much they’ll let you borrow-usually between 40% and 60% of your equity, depending on your age and risk profile.

For someone aged 65 or older, you might access up to 50% of your equity. That’s $325,000 in this example. For someone younger, say 55, the cap might drop to 30%, or $195,000. Why? Because lenders need to protect their investment. The longer you live, the more interest accrues, and the higher the risk they’ll lose money if the home’s value drops.

Age Matters More Than You Think

Your age is the single biggest factor in how much you can release. Lenders use actuarial tables to estimate your life expectancy. The older you are, the more they’re willing to lend because the loan will likely be repaid sooner-either when you move, sell, or pass away.

Here’s a rough guide based on typical NZ lender limits:

• Aged 55-59: Up to 25-30% of home value
• Aged 60-64: Up to 30-40% of home value
• Aged 65-69: Up to 40-50% of home value
• Aged 70-74: Up to 50-55% of home value
• Aged 75+: Up to 55-60% of home value

These aren’t official rules-each lender sets their own. But they’re consistent across the market. If you’re 72 and own a $700,000 home with no mortgage, you could potentially release $385,000 to $420,000. That’s a life-changing amount for retirement spending, medical costs, or helping family.

Location Affects Your Loan Amount

Not all homes are created equal. Lenders care about where your property is. A house in Ponsonby, Takapuna, or Christchurch’s central suburbs will get you better terms than one in a rural town with low demand. Why? Because lenders need to know they can sell the property quickly if needed.

In Auckland, where property values are high and turnover is steady, lenders are more confident. In smaller towns like Taumarunui or Dargaville, they may reduce your loan-to-value ratio by 10-15%. So even if you’re 70 and have $500,000 in equity, you might only get access to $200,000 instead of $275,000.

Always get your home professionally valued before applying. A bank valuation might be conservative. A private appraisal could open up more options.

Health Can Increase Your Access

Here’s something most people don’t know: if you have a serious medical condition-like heart disease, cancer, or advanced diabetes-you might qualify for a higher payout. Some lenders offer enhanced equity release plans for people with reduced life expectancy.

For example, someone with stage 3 cancer might be approved for 65% of their equity instead of 50%. The lender assumes the loan will be repaid sooner, so they’re willing to lend more upfront. This isn’t advertised widely, but it exists. If you or your partner have a health issue, mention it upfront. Don’t assume you’re ineligible.

What Happens When You Die?

This is the biggest fear people have. Will your kids lose the house? Will they owe more than it’s worth?

In New Zealand, most equity release products are non-recourse. That means your estate can’t be held responsible for any shortfall if the home sells for less than the loan balance. The lender eats the loss. But they also cap the total amount you can borrow to protect themselves.

Some lenders offer a “no negative equity guarantee.” This is standard in the UK and becoming more common here. Always ask for it in writing. If it’s not in the contract, walk away.

Also, your beneficiaries can choose to repay the loan and keep the house. Many do-especially if the property has appreciated. If your home is worth $900,000 at the time of your passing and you owe $400,000, your family can pay off the loan and keep the $500,000 in equity.

Alternatives to Equity Release

Before you commit, ask yourself: are there better options?

• Selling and downsizing: If you live in a four-bedroom house but only use two rooms, selling and moving to a smaller place could free up cash with no debt. You might walk away with $300,000+ after buying a $400,000 apartment.
• Part-time work or rental income: Renting out a room or garage can add $300-$800 a month without touching your home’s equity.
• Government support: New Zealand Superannuation is $530/week for a single person. If you’re not claiming it fully, you might qualify for additional allowances like Accommodation Supplement.
• Home equity loan: If you’re under 60 and still working, a secured personal loan might be cheaper than a reverse mortgage. Interest rates are lower, and you control repayments.

Equity release should be your last resort-not your first. But if you’ve tried everything else and still need cash, it’s a valid tool.

Costs and Fees to Watch For

Equity release isn’t free. You’ll pay:

• Valuation fee: $300-$600
• Legal fees: $800-$1,500 (you need independent legal advice by law)
• Application fee: $500-$1,200
• Interest: 6%-9% per year, compounded

That’s $2,500-$4,000 in upfront costs. And because interest compounds over time, your debt can grow fast. If you release $300,000 at 7% interest and don’t pay anything for 10 years, you’ll owe $590,000. That’s not a trap-it’s math. But you need to see it clearly.

Always ask for a projected balance after 5, 10, and 15 years. Get it in writing. If the lender won’t give you this, they’re not transparent enough to trust.

Who Should Avoid Equity Release?

Not everyone should do this. Walk away if:

• You’re under 60 and still earning a steady income
• You plan to move in the next 5 years
• You have other assets (superannuation, investments, life insurance) you haven’t tapped
• Your family expects to inherit the home and you haven’t talked to them
• You’re pressured by family or a salesperson to do it now

Equity release is irreversible. Once you take the money, you can’t undo it. You’re trading future value for present cash. Make sure it’s worth it.

How to Get Started

If you’re serious, follow these steps:

1. Get a free, no-obligation home valuation from two different real estate agents.
2. Check your current mortgage balance. If you’re unsure, call your bank.
3. Calculate your equity: home value minus mortgage debt.
4. Use an online equity release calculator (many NZ lenders offer them).
5. Book a free consultation with a licensed financial adviser who specializes in retirement planning-not just mortgage brokers.
6. Get independent legal advice. This is mandatory. Don’t skip it.
7. Compare at least three lenders. Don’t just go with your bank.

There’s no rush. Take your time. This decision affects your legacy.