In New Zealand, the traditional notion of entering retirement mortgage-free is rapidly shifting. A growing number of New Zealanders aged 65 and over are carrying mortgages into retirement, challenging the long-held belief that homeownership in retirement represents financial security. According to Centrix, the number of retirees with mortgage debt has seen a sharp rise, climbing from 118,000 in 2018 to 136,000 in 2023, with total mortgage debt surpassing $25 billion.
Mortgage Debt Among New Zealanders Over 65 (2018-2023)
This increase is set against the backdrop of a rapidly ageing population. As of 2023, New Zealand has just over 800,000 people aged 65 and older, with projections estimating this number will reach one million by 2027 and could approach 1.5 million by 2050 (StatsNZ). With around 17% of those aged 65 and over still holding mortgages, it is clear that financial trends are shifting, and for many, retirement now includes significant housing debt.
Factors Contributing to Mortgage Debt in Retirement
Several factors are driving the trend of people retiring with mortgage debt. One major influence is that property prices have grown significantly faster than income levels. According to the Real Estate Institute of New Zealand (REINZ), the median property price in New Zealand rose from $560,000 in January 2018 to $780,000 by January 2023—a staggering increase of 39%. In contrast, wage growth has been relatively modest. This imbalance means many New Zealanders have had to borrow more to buy homes, stretching mortgage repayments well into their retirement years
The median property price in New Zealand rose from $560,000 in January 2018 to $780,000 by January 2023 (REINZ)
Another factor is the increasing tendency for older New Zealanders to take out mortgages later in life, often to fund home improvements, consolidate debt, or provide financial assistance to children. As life expectancy rises and more people plan to work beyond the traditional retirement age, many feel confident managing mortgage payments while anticipating a continued income stream.
According to Statistics New Zealand, life expectancy for men and women has steadily increased, reaching 80.5 and 84 years, respectively, as of 2021. This longevity, coupled with the growing trend of later retirement, gives some older adults the confidence to maintain mortgage debt well into their 60s and 70s. For others, it is a financial necessity rather than a choice.
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