Heartland, NZ's largest reverse mortgage product provider, said enquiries were up by more than a third on the same period last year.
The bank said retirees “struggling to cover the cost of living may find that the booming housing market could be a solution to their financial troubles”.
The spike in enquiries comes as house prices skyrocketed in the first three months of the year. According to the Real Estate Institute of New Zealand, the median NZ house price rose by 22% from March 2020 to March 2021.
Heartland described the rise in house prices as good news for homeowners, but cautioned costs had also risen for retirees over the past 12 years.
With steady savings options such as term deposits failing to offer decent returns, more retirees are looking at alternative ways to fund their lifestyle.
Reverse mortgages offer an attractive solution to retirees' financial problems, said Andrew Ford, Heartland's head of retail.
“This massive decrease in savings interest rates has presented a problem for retirees who often rely on these returns to help cover their living costs. People are now looking for alternative ways to fund the retirement lifestyle they want."
Ford said there was still a lack of awareness around the product, however.
“Many people over the age of 60 don’t realise that a reverse mortgage could help them fund the retirement they desire and deserve.”