There are two main equity release options options: reverse mortgages, where you can borrow against the equity in your home and instead of paying the interest, it compounds over time until the property is sold or you die; and home reversion, where you\u2019re typically paid 2.5% of the value of your home (less fees) each year, in exchange for selling 3.5% of the value of your home.<\/p>\n
Bagrie provides analysis of the options for clients through his business Equity Release NZ and says the decision isn\u2019t always solely financial. <\/p>\n
\u201cIf you want flexibility \u2013 say, a lump sum for a medical emergency or repairs \u2013 the debt product [a reverse mortgage] gives you that. If you want certainty and stability, the annuity style [home reversion] is better\u201d.<\/p>\n
However, purely based on numbers, Bagrie says: \u201cFinancially, a reverse equity mortgage tends to be more favourable out to about year eight. After that, compounding interest kicks in.\u201d<\/p>\n
He says whichever option you choose, there is always a cost. \u201cThere\u2019s no free lunch here. Each of the products has got their pros and cons.\u201d<\/p>\n
Bagrie encourages people to investigate all their options \u2013 including family. \u201cIs it better off for the family to take an equity stake in the home? You can get a little bit complicated within family circles when it comes to divvying up assets at the end, but those sorts of avenues should always be investigated.\u201d<\/p>\n
Listen to the full episode of The Prosperity Project<\/a> for more.<\/p>\n The podcast is hosted by Nadine Higgins, an experienced broadcaster and a financial adviser at Enable Me.<\/p>\n You can follow the podcast at iHeartRadio<\/a>, Apple Podcasts<\/a>, Spotify<\/a> or wherever you get your podcasts. New episodes are released every Monday.<\/p>\n","protected":false},"excerpt":{"rendered":"There are two main equity release options options: reverse mortgages, where you can borrow against the equity in…\n","protected":false},"author":2,"featured_media":48850,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[27245,26695,138,6932,4187,2109,71,1345,4188,13457,130,111,139,69,10112,3263,42371,20586,7676,13011,294,801,4578,42370,314,223,165,31871],"class_list":["post-48849","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-beyond","tag-bills","tag-business","tag-cash","tag-cost","tag-family","tag-from","tag-home","tag-living","tag-look","tag-more","tag-new-zealand","tag-newzealand","tag-nz","tag-power","tag-project","tag-prompting","tag-prosperity","tag-rates","tag-retirees","tag-retirement","tag-rising","tag-savings","tag-soaring","tag-superannuation","tag-the","tag-their","tag-unlocking"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/48849","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=48849"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/48849\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/48850"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=48849"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=48849"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=48849"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}