Reverse Mortgage Calculator
Model a Heartland-style reverse mortgage. See max LVR by age, compounding debt over time, and estate equity remaining after years of drawdown.
About this calculator
This calculator implements Heartland reverse mortgage LVR + interest rate schedule from Heartland Bank NZ. Last consulted 18 May 2026. Verify the figures yourself by following the link.
Heartland Reverse Mortgage parameters
Mid-2026 indicative- •Interest rate: ~9.25% p.a. variable
- •Compounding: Monthly (no regular repayments)
- •Max LVR at age 60: 20%
- •Max LVR at age 70: 30%
- •Max LVR at age 80: 45%
- •Min property value: $200,000
- •No Negative Equity Guarantee: Yes — debt can't exceed home
Source: Heartland Bank NZ
Disclaimer
This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available IRD data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.
How a Heartland reverse mortgage compounds
Borrow against home equity. No regular payments — interest compounds monthly. Repaid on sale/death.
- 1
Max borrowing by age
Max_borrow = home_value × LVR(age)
LVR: 60yo 20%, 70yo 30%, 80yo 45%.
- 2
Compounding balance
Balance(t) = (Balance(t-1) + monthly_drawdown) × (1 + r ÷ 12)
r ≈ 9.25% p.a. variable.
- 3
Future home value
Home(t) = Home_0 × (1 + growth_rate)^t
Assume 3-4% long-term NZ growth.
- 4
Estate equity
Equity = max(0, Home(t) − Balance(t))
NNG: debt can never exceed home value.
Worked example
Inputs: $900k home, age 70, $50k lump + $1,200/mo for 15yr, 3.5% growth
Result: Max borrow $270k. After 15yr: debt ~$664k, home $1.51M, equity ~$844k.
Frequently Asked Questions
How does a reverse mortgage work in NZ?
Is a reverse mortgage a good idea?
How does a NZ reverse mortgage affect my will and inheritance?
Are there alternatives to a reverse mortgage in NZ?
The reverse mortgage calculator models a Heartland-style NZ equity release: how much you can borrow at your age, how the compounding debt grows with no repayments, and how much estate equity remains after years of drawdown.
How this calculator works
A reverse mortgage lets homeowners aged 60+ borrow against their home with no regular repayments — interest (about 9.25% variable) is added to the balance monthly and the loan is repaid when the home is sold or the owners pass away. Your maximum loan-to-value ratio rises with age: roughly 20% at 60, 30% at 70, and 45% at 80. Because nothing is repaid, the debt compounds: at 9.25%, a balance doubles roughly every eight years. The calculator grows your drawdowns (lump sum plus any monthly amounts) at the interest rate, grows the house at your assumed property inflation (3-4% long-term), and reports the equity left for your estate each year. New Zealand providers include a No Negative Equity Guarantee — the debt can never exceed the sale value of the home. The main planning risks are the erosion of inheritance and the effect on residential-care means testing, so independent legal advice is mandatory before signing.
Heartland-style reverse mortgage parameters
| Interest rate | ~9.25% p.a. variable, compounding monthly |
| Max LVR at age 60 | ~20% |
| Max LVR at age 70 | ~30% |
| Max LVR at age 80 | ~45% |
| Minimum property value | $200,000 |
| No Negative Equity Guarantee | Debt can never exceed the home's sale value |
| Rule of thumb | Debt roughly doubles every 8 years at 9.25% |
Worked Examples
$900,000 home, age 70: $50,000 lump sum plus $1,200/month for 15 years, 3.5% house growth
After 15 years: debt ≈ $664,000, home ≈ $1.51M — estate equity ≈ $844,000.
- Max available at 70: $900,000 × 30% = $270,000 — the plan fits
- Drawdowns compound at 9.25%: balance after 15 years ≈ $664,000
- Home grows: $900,000 × 1.035^15 ≈ $1,508,000
- Estate equity: $1,508,000 − $664,000 ≈ $844,000
$700,000 home, age 65: single $100,000 lump sum, left for 10 years, 3.5% growth
Debt grows to ≈ $251,000; home ≈ $987,000 — equity ≈ $736,000 remains.
- $100,000 compounding monthly at 9.25% for 10 years: ≈ $251,000 (2.5×)
- Home: $700,000 × 1.035^10 ≈ $987,000
- Estate equity: ≈ $736,000
- The debt more than doubled — time is the dominant variable
Built and maintained by Konstantin Iakovlev. Data sourced from the IRD and official New Zealand government sources.
Last reviewed: