The cost of moving out: the physical, mental, and financial impact on retirees

If you’re a homeowner aged 60 or over and thinking about downsizing to help fund your retirement, it’s worth carefully considering the emotional, physical and financial impact moving out can have.

Heartland Bank has helped more than 22,000 customers live a retirement they deserve. We understand that packing up a lifetime of memories and belongings, and saying goodbye to those living around you, can be difficult. For many retirees, aging in the home you love is far more enjoyable and greatly outweighs the benefit of moving out.

Whilst the thought of moving into a new home can be exciting, the complexities of finding a new place to live can be an expensive, emotional and exhausting exercise, especially for older people who are familiar with their neighbourhood and community.

Once you add up the cost to buy, the valuation and survey costs, deposit, real estate and legal fees, then factor in the actual moving costs, which can be thousands depending on where you’re moving, the total amount can be significant. On top of this is the logistical stress of moving out, including packing your personal items, storing, selling or disposing of furniture, cleaning up, redirecting your mail, reconnecting your utilities, finding new healthcare providers, meeting new neighbours and joining new community centres and groups.

There are alternative options for older Kiwis, who are feeling the pinch

According to a review by the Retirement Commission , there are an increasing number of over 60-year-olds with debt in retirement, and this is difficult to manage on NZ Super alone. With inflation and the cost of living continuing to rise, reverse mortgages are increasingly being used to supplement retirement income and/or consolidate debt.

A Heartland Reserve Mortgage is a specialised loan for Kiwis aged 60 and over, who own their own home. Different to a standard home loan, a reverse mortgage allows seniors to release equity from their home, without the need to make regular repayments.

What can a reverse mortgage be used for?

Most of Heartland Bank’s customers are using their reverse mortgage for essential home repairs, or to consolidate outstanding debt or bills. A reverse mortgage can also be used to fund home improvements, upgrade a car, for medical expenses, or to simply supplement income to support or improve the customer’s standard of living.

A reverse mortgage can help retirees combat cost of living pressures, without having to give up their home. The amount you can access depends on your age and the value of your home. Designed with the needs of retirees in mind, no repayments are required until the customer moves out, with the flexibility to make repayments at any time without penalty, if preferred.

Most importantly, retirees can continue to own their own home and live in it for as long as they choose, without having to deal with the physical, mental and financial stress of moving out.

Reverse mortgages are on the rise as acceptance and awareness grows. In fact, as the leading reverse mortgage provider in New Zealand, Heartland Bank experienced 24% annualised growth in their Reverse Mortgage product in the six-month period between July and December 2022.

For homeowners who are aged 60 and over, it’s worth exploring the option of a reverse mortgage – it could help fund a more comfortable and enjoyable retirement. Find out more by visiting the Reverse Mortgage section on our website.

Applications are subject to loan approval criteria. Heartland Bank Limited’s responsible lending criteria, fees and charges apply.