Current rates, checked 19 October 2026
| Lender | Variable rate | Effective from |
|---|---|---|
| Heartland Bank Reverse Mortgage | 8.25% p.a. | 29 September 2026 |
| SBS Unwind Reverse Equity Mortgage | 7.99% p.a. | 12 September 2025 |
Both rates are variable and change without a fixed schedule. Confirm with the lender before relying on them.
Current Rates From Heartland And SBS
Heartland lifted its rate from 7.75 percent to 8.25 percent in late September 2026, having cut it to 7.75 in January. SBS Unwind has held at 7.99 percent since September 2025. Over the past few years the two have sat within a quarter of a percent of each other and have swapped position several times, which is why I would not choose a lender on rate alone.
Both lenders also charge a default rate above the standard rate if you breach the loan conditions: up to 2 percent above at Heartland, 4 percent above at SBS. Keeping rates and insurance paid and the house maintained avoids this.
Why They Sit Above Standard Home Loan Rates
In October 2026 a standard floating home loan is in the mid-to-high fives and a one-year fixed rate below that. Reverse mortgage rates sit two to three percentage points higher. Three things explain the gap.
The lender is not paid for an unknown number of years. With a standard loan, the bank gets principal and interest back every month. With a reverse mortgage it gets nothing until the house sells, which could be two years or twenty-five. That uncertainty is priced in.
The no negative equity guarantee is a real cost. If house prices stall and the borrower lives a long time, the lender can end up owed more than the house is worth and has promised to absorb the difference. The margin covers that risk.
Funding is more expensive. Reverse mortgage lenders in New Zealand cannot fund these loans with ordinary deposits as cheaply as the big banks fund home loans, and the Reserve Bank’s capital rules treat them more conservatively. Heartland has said it will take part in an RBNZ review of those capital settings, which could in time affect pricing, though nothing has changed yet.
Floating Only: What That Means For You
There is no fixed rate option with either lender. The rate floats for the life of the loan.
Two consequences follow. The first is that you cannot lock in a cost. If rates rise two percent over the next decade, the balance grows faster than any projection you were shown at the start. The second is that there is no break fee. You can repay some or all of the loan whenever you like, with only a discharge fee (Heartland’s is $270) when it closes. That flexibility is genuinely useful and it is the reason some clients pay the interest for a few years while they still have income.
How A One Percent Difference Plays Out Over 15 Years
Compounding makes small rate differences matter over long periods. Here is $100,000 drawn at settlement, nothing repaid, interest added monthly:
| After | At 7.25% | At 8.25% | At 9.25% |
|---|---|---|---|
| 5 years | $143,500 | $150,800 | $158,500 |
| 10 years | $205,900 | $227,500 | $251,300 |
| 15 years | $295,400 | $343,100 | $398,300 |
A one percent higher rate over fifteen years costs roughly $48,000 on $100,000, and that comes straight out of what the house leaves behind. It is the main reason to borrow slowly and to borrow less.
Rate Caps And Older Loans
Heartland publishes separate rates for loans settled between 2005 and 2014 that carried margin caps from the original lender, Sentinel, which Heartland acquired. Those borrowers pay a rate tied to the cap rather than the current standard rate. If you have one of those older loans, do not assume the headline rate applies to you; check your statement.
New loans have no cap. The rate is whatever the lender sets.
Getting The Rate In Context Before You Sign
The rate is one of the smaller decisions. How much you borrow, how you draw it and how long the loan runs each matter more to the final cost than a quarter of a percent between lenders. The lender whose property criteria, drawdown facility and equity protection suit you is usually the better choice even at a slightly higher rate.
That is the comparison I prepare for each client, with the current rates on the day and a projection at a higher rate as well, so nobody is surprised if the floating rate moves. Book a chat or run your own numbers on the calculator.
