Retirement is a time for relaxation, not financial stress. But for many Kiwis, moving into a retirement village, means selling their home first.  This can take time if the market is slow or the timing is not right.

That is where the newly introduced Village Access Loan can help, from Heartland Bank.  This loan is specifically designed for New Zealanders 60 years+ and who are ready to move into a retirement village but have not yet sold their home.

How does the Loan work?

The loan allows homeowners to borrow up to 50% of their home’s value to cover the upfront costs of moving into a retirement village and features:

1. No Regular Repayments: You don’t need to make regular repayments during the loan term.  Interest is calculated monthly and added to the loan balance.  You can choose to make voluntary repayments at any time without penalty.
2. Flexible Loan Term: The loan term is up to three years, giving you time to sell your property without pressure.
3. Equity Protection: You can opt to protect a percentage of the eventual net sale proceeds of your home, ensuring you retain a portion of your home’s value.
4. Independent Legal Advice: Before proceeding, you must obtain independent legal advice.
5. The current interest rate is 9.59% per annum.

Who Is Eligible?

To qualify for a Village Access Loan, you must:

1. Be aged 60 years or over;
2. Use the loan to purchase an occupation right in a retirement village;
3. Own a home with a minimum value of $250,000.00; and
4. Obtain independent legal advice on the loan agreement.

In summary, the Village Access Loan provides a practical solution for Kiwis looking to move into a retirement village without the immediate need to have sold their home. As with any loan, it pays to understand the fine print. We are here to help you navigate if this option is right for you and to discuss alternative solutions.