Lifetime Home: Debt Free Equity Release
Secure Your Retirement with Lifetime Home – A Debt-Free Equity Release Solution
Are you 70 or older and looking for a way to supplement your retirement income without the burden of debt? With Lifetime Home, you can unlock the value of your mortgage-free home without taking on a mortgage, debt, or interest. Enjoy the certainty of regular income to support your day-to-day living, giving you peace of mind and financial freedom in your golden years.
Lifetime Home is not a reverse mortgage. Here’s why.
If you ask people what they know about home equity release, many (if not most) would probably mention reverse mortgages. That makes sense, since for a long time they were the only equity release option available to Kiwis. Until Lifetime Retirement Income launched Lifetime Home in 2024.
Equity release doesn’t always mean a loan
Equity release actually refers to any financial arrangement that allows homeowners, typically seniors, to access the capital tied up in their property without having to sell up completely and move.
A reverse mortgage is one option, where the homeowner takes out a loan against their property, with repayment of the initial amount plus accrued interest typically deferred until the homeowner moves out or passes away.
The other option is the debt-free model, commonly known as home reversion, which involves the homeowner selling a portion of their property. This is the basis for Lifetime Home, which specialises in providing retirees aged 70 or older with a regular income to help meet day-to-day expenses.
How Does Lifetime Home Work?
Exchanging an interest in your home for retirement income.
Equity Sold: As the homeowner, you sell Lifetime Home Limited normally 35% interest in your home, which accrues over a ten-year period (3.5% per annum).
Income Paid: Lifetime Home Limited buys the equity in your home, at normally 25% of the Initial Value (an agreed value with reference to an independent valuation), which is paid over a 10-year period (2.5% per annum less fees and charges). The purchase price is paid in regular income payments providing financial stability throughout your retirement.
Ownership: After ten years, you retain normally 65% ownership of your home, with the option to extend the Agreement if you desire.
Occupancy: After ten years, whether you choose to extend your equity release or not, you retain the right to remain in your home for as long as you wish, as long as it is safe to do so, and other terms of the Agreement are met.
Sale Proceeds: When you (or your estate) eventually sell the home, Lifetime will receive its interest of the sale price.
Shared Outcomes: When the home is sold, you and Lifetime Home share the outcome together. If the property value has increased, Lifetime Home normally would share the value 65% homeowner and 35% Lifetime Home Limited. If the property value has decreased, you share the value in the same proportions.
Understanding the numbers:
2.5%: You will receive 2.5% of the Initial Value of the home annually. This will be paid less fees, fortnightly for ten years (a total of 25% of the Initial Value of the home).
35%: At the end of ten years Lifetime will have a 35% interest your home.
10 Years: Income payments cease after ten years; however, you can remain in your home for as long as you wish, subject to the terms of the Agreement.
0.23%: The Annual Fee paid to Lifetime Home Limited based on the Initial Value of the home at the commencement of the agreement.
Benefits of Lifetime Home
Retirement Income
Receive a steady income stream, paid fortnightly, to supplement your NZ Superannuation.
Living Comfortably
Paid the same day as NZ Super, it helps supplement your retirement income needs.
Certainty
You know from the outset exactly how much of your home you will still own after 10 years, providing stability and peace of mind for your retirement.
Debt-Free Equity Release
Say goodbye to mortgages and loans. Lifetime Home provides access to your home's equity to supplement your retirement income without adding to your debt obligations.
Security
Maintain the right to live in your home for life, subject to the terms of the Agreement, ensuring you can enjoy your retirement years in familiar surroundings.
You can learn more by visiting Lifetime Retirement Income website or viewing their videos below. Call us on 07 578 3863 if you'd like to discuss this option.
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