Plenty of people over 60 assume the bank will not lend to them any more. That is partly true and partly not, and the gap between the two is where a lot of money gets wasted.
A standard home loan after 60 is still possible if you have income. A reverse mortgage is possible with no income at all. Which one you should use depends on what you have, what you need and how long you plan to stay in the house.
Repayments: Monthly vs None
This is the headline difference and it drives everything else.
A standard loan requires principal and interest payments every fortnight or month. Miss them and the bank can eventually force a sale. On NZ Super alone, a $100,000 loan over 15 years at around 6 percent means roughly $845 a month, which is most of a single person’s Super.
A reverse mortgage requires nothing. Interest is added to the balance instead. The cost is that the balance compounds, so the same $100,000 becomes about $343,000 after 15 years at 8.25 percent if you never pay anything.
Put the two side by side and the trade is clear: cash flow now, in exchange for a much larger debt later.
Interest: Fixed Options vs Floating Only
Standard home loans in New Zealand can be fixed for up to five years, and the fixed rates are usually cheaper than floating. A reverse mortgage has no fixed option with either lender. The rate floats for the life of the loan, and that life is often fifteen or twenty years.
The reverse mortgage rate also sits higher. As at October 2026, Heartland charges 8.25 percent and SBS Unwind 7.99 percent, against standard floating rates in the mid-to-high fives and fixed rates below that. The gap is the price of the lender agreeing to wait an unknown number of years to be repaid.
One consequence people miss: a floating reverse mortgage has no break fee. You can repay the lot the day your Lotto numbers come up, with only a discharge fee of $270 at Heartland.
Who Qualifies: Income vs Age And Equity
A bank assessing a standard loan wants to see you can afford it. After 65 that usually means a provable income beyond Super, a credible exit plan before the term ends, and often a shorter term, which pushes the repayments up. Under the responsible lending rules that came in during the early 2020s, a lot of retirees who would have been approved a decade ago now get declined, even with a mortgage-free house.
A reverse mortgage lender does not assess income. It assesses age, the property and your credit history. You need to be 60 or older (Heartland may accept a partner aged 55 to 59 alongside a borrower over 60), the property needs to be worth at least $250,000 and be of conventional construction in good repair, and it needs to be freehold or able to be cleared by the new loan.
This is the reason reverse mortgages exist. For many people over 70, it is the only secured borrowing available.
How Much You Can Borrow Under Each
With a standard loan the limit comes from your income. With a reverse mortgage the limit comes from your age.
Heartland allows the youngest borrower’s age minus 40, as a percentage of the home’s value: 20 percent at 60, 30 percent at 70, 40 percent at 80, capped at 50 percent. SBS Unwind starts at about 10 percent at 60 and reaches 30 percent at 80, with the same 50 percent cap. On a $900,000 house at 70, that is up to $270,000 from Heartland and roughly $180,000 from SBS.
A standard loan has no age-based cap, but at 70 on Super alone, the affordability test may give you nothing at all.
When A Standard Loan Still Makes Sense After 60
I see three situations where I point people away from a reverse mortgage and back towards a bank.
The first is where there is still real income. A 63-year-old consultant working three days a week can often service a modest standard loan at a lower rate, with the balance falling rather than rising. Switching to a reverse mortgage at that age locks in compounding from the youngest possible starting point.
The second is a short horizon. If you plan to sell and move into a retirement village within three or four years, a standard loan, a bridging arrangement or Heartland’s separate Village Access Loan may be cheaper than setting up a reverse mortgage you will discharge almost immediately, with the $920 arrangement fee gone.
The third is where there is an existing standard loan with a small balance and a few years to run. Rolling it into a reverse mortgage stops the repayments, which can be the right call on a tight budget, but it also stops the balance falling. Sometimes the better answer is to extend the term with the existing bank.
Which One Suits Your Situation
If you are under 65 with some income, ask the bank first. If you are over 70 on Super with a paid-off house and a specific need, the reverse mortgage is usually the only door open, and it can be a good one if the amount is kept small.
Where it is unclear, that is the conversation I have with clients most weeks. I can tell you what a bank is likely to say before you apply, and whether a reverse mortgage, a standard loan or something else entirely fits what you are trying to do. The advice page explains how that works and what it costs you, which is nothing.
