What Is a Reverse Mortgage?
A reverse mortgage is a loan that lets older homeowners convert part of their home equity into cash without making monthly mortgage payments. Instead, the loan balance grows over time and is usually repaid when the homeowner sells, moves out permanently, or dies. In the US, the most common type is the HECM, for borrowers aged 62 or older.
Ongoing Obligations
Borrowers must still pay property taxes, homeowners insurance, and upkeep; failing to do so can cause the loan to become due.
Costs
Reverse mortgages involve upfront fees and mortgage insurance, and because interest is added to the balance, the equity left can shrink over time.
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🔗 Related Terms
More Home Buying Terms
- Adjustable-Rate Mortgage (ARM)
- Appraisal Gap
- Assessed Value
- Bridge Loan
- Cash-Out Refinance
- Closing Costs
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.