Introduction to equity release

If you own a house or other real estate, but you don’t want so much money tied up in it, you might consider equity release.

Equity release frees up money for important expenses. You might need help with day-to-day living costs, or to pay for a major expense such as a new car, replacing a roof or a medical operation. You might even want to help out a family member with student fees or buying a home.

Whatever the need, there are lots of options available and they all need to be considered carefully.

The Retirement Commissioner's view of equity release

Retirement Commissioner Diana Crossan believes that people need to look carefully at equity release to make sure it suits their needs.

Equity release is a relatively unfamiliar concept for New Zealanders, who are typically reluctant to reduce the capital in their homes after they retire. The Retirement Commission expects the equity release market to develop, which is likely to mean more companies offering products in the future.

If you’re interested in equity release products, check them thoroughly and be sure they’re right for your situation. There are also alternatives you can consider, such as trading down your house, subdividing a property or taking in a tenant. Make sure you explore all the options.

Research on equity release

The Retirement Commission has sponsored research on equity release products and services. You can read this information at:

Home Equity Release Schemes in New Zealand: Consumer Perspectives by Judith Davey and Virginia Wilton, New Zealand Institute for Research on Ageing (July 2006)

The Prospects and Potential for Home Equity Release in New Zealand: Update to 2005 by Judith Davey, New Zealand Institute for Research on Ageing