Jul 03 2024

Lifetime redefines home and income

After years of research and development, Lifetime is delighted to launch New Zealand’s first debt-free home equity release income solution for retirees.


Why is it a big deal?

All Kiwis benefit from NZ Superannuation when we reach the age of eligibility. It’s an excellent benefit, it’s universal and it isn’t means tested. It’s also not enough to cover the cost of living for most retirees, leading to what’s commonly called the “retirement income gap”.

Lifetime Retirement Income’s primary goal is to help Kiwis bridge this income gap, by supporting people to save for retirement as well as delivering innovative solutions that provide retirees with a sustainable source of income through their post-work years.

That’s where Lifetime Home comes in.


A new option for retirement income

With Lifetime Home, there’s no mortgage, no debt, no interest, just regular retirement income to help supplement day-to-day living in retirement.

Kiwis have not had access to a debt-free equity release product. Until now.

Lifetime’s founder and managing director Ralph Stewart explains: “Lifetime Home is a new retirement income option for retired Kiwi homeowners to tap into what, for many, is their biggest asset – their home – to bolster their income in retirement.

“Around two thirds of New Zealanders aged over 65 are fortunate enough to own their home outright, which provides a great sense of security as they age.

“But many of this cohort have little to no other savings, meaning NZ Superannuation (NZ Super) is their only income. NZ Super is a wonderful benefit, but we know it’s not enough for most retirees to live on, let alone fund a comfortable, dignified retirement.

“Home equity release products can provide a life-changing opportunity for our asset-rich Kiwi retirees to really make the most of their post-work years by deriving an income based on the value of their house, while retaining the security of a home for life,” he says.


Home equity release explained

‘Home equity release’ refers to any financial arrangement that allows homeowners to access some of the wealth tied up in their home without having to sell up. It’s not a new concept. Globally, around US$15 billion dollars of equity is released annually, and this is expected to climb to US$50 billion dollars by 2031.

This can be a practical solution to the challenge facing many retirees of having a high-value asset but with limited liquidity (or cashflow). Equity release products allow homeowners to access funds for living expenses, healthcare, or other financial needs while continuing to live in their home.


The reverse mortgage

You will probably be familiar with one type of equity release: the reverse mortgage. This involves the homeowner taking out a loan against the value of their property. Typically, the loan plus accumulated interest is repaid when the home is eventually sold.

Until now, a reverse mortgage was the only option for Kiwi retirees to access the wealth tied up in their home without selling up.


Debt-free equity release (also known as Home Reversion)

The debt-free home equity release alternative does not require a mortgage, debt, or payment of interest. Instead, the homeowner sells a slice of their home to a service provider, who pays for it as either a lump sum or through regular income payments.

Like with a reverse mortgage, the homeowner retains the right to live in their property rent-free until the home is sold, at which point the proceeds are shared according to the proportions of ownership.


Enter Lifetime Home: New Zealand’s first debt-free equity release retirement income solution.

Who is eligible?

A single person or a couple where the youngest is at least 70 years old who own their home outright.


How does it work?

In a nutshell, Lifetime Home buys a portion of the home based on a mutually agreed independent valuation and pays the homeowner a regular income stream over ten years. This income is paid the same day as NZ Super and can be fortnightly or every four weeks.

Unlike traditional loans or mortgages, debt-free equity release does not add to the homeowner’s debt burden. Instead, it allows them to access the wealth tied up in their home while continuing to live in it. The income they receive is based on the equity sold, not borrowed funds.


Certainty and security

The homeowner is always the majority owner of their home and knows from the outset how much of it they’ll still own after 10 years, providing stability and peace of mind in retirement. They also retain the right to live in their home for life, meaning they can enjoy their retirement years in familiar surroundings. 


Get in touch

If you’re interested in finding out more about Lifetime Home, check out our website:

Or contact us directly by clicking here.


Written by: Vanessa Glennie

Vanessa is Head of Communications at Lifetime Retirement Income. She’s an experienced investment writer, having spent more than a decade writing about financial markets in the global fund management industry.