A reverse mortgage is a home loan designed for older homeowners—generally age 62 and up (some private options are available starting at age 55). It allows you to turn a portion of your home’s equity into cash while continuing to live in your home.
Reverse mortgages were created to help retirees who may be living on a fixed income use the value they’ve built in their homes to help cover everyday expenses, medical costs, or other financial needs. There are no limits on how the money can be used, which is why many homeowners now include a reverse mortgage as part of a broader retirement strategy to improve their financial flexibility and peace of mind.
It’s called a “reverse” mortgage because it works differently than a traditional home loan. Instead of making monthly mortgage payments to a lender, you receive payments—or access to funds—from the lender.
You don’t have to repay the loan until you sell the home, move out permanently, or pass away. As long as you continue to live in the home, no monthly mortgage payments are required. However, you must keep up with property taxes, homeowners insurance, and any applicable homeowners association dues.