Reverse Mortgage: How It Works
For homeowners 62 and older: turn equity into cash with no required monthly mortgage payment.
- Who can get one
- Homeowners 62 and older
- How you get paid
- Lump sum, monthly payments or a credit line, depending on the product
- Monthly mortgage payments
- Not required, but you must keep paying property taxes, insurance and upkeep
- When it's repaid
- Typically when you sell, move out permanently, or pass away
- Best for
- Older homeowners with significant equity who plan to stay in their home
A reverse mortgage lets homeowners who are 62 or older borrow against their home’s equity without making required monthly mortgage payments. Instead of you paying the lender each month, the loan balance grows over time and is repaid later, typically when you sell the home or no longer live in it.
How it works
The amount you can access depends on your age, your home’s value, current interest rates and how much you still owe on any existing mortgage. Many reverse mortgages must pay off an existing mortgage first. You can usually receive the money as a lump sum, regular payments, a line of credit, or a combination, depending on the product.
You still own your home, and you’re still responsible for property taxes, homeowners insurance and maintenance. Failing to keep up with those can put the loan in default.
Who it tends to suit
- Homeowners 62 or older with substantial equity.
- People who plan to stay in their home and want to free up cash without a new monthly payment.
- Borrowers who understand that the balance grows over time.
Things to weigh
- The balance grows, because interest and fees are added to what you owe, which reduces your remaining equity.
- You must keep paying taxes, insurance and upkeep.
- It affects what’s left for heirs. Talk it through with family.
- Fees can be significant. Compare costs between lenders.
- Counseling is often required for certain federally insured reverse mortgages. It’s worth using even where it’s optional.
Compare before you choose
Lenders differ on eligibility and fees. Take the quiz to see options that fit your situation, or browse the comparison directory.
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Frequently asked questions
Do I still own my home with a reverse mortgage?
Yes. You keep the title as long as you meet the loan's requirements, which include paying property taxes and homeowners insurance and keeping the home in good repair.
Do I have to make monthly payments?
You aren't required to make monthly mortgage payments, but interest is added to the balance over time, so the amount you owe grows.
What happens to the loan when I move or pass away?
The loan generally becomes due. It's usually repaid by selling the home, and your heirs can typically keep the home by repaying the balance. Ask each lender how this works for the product you're considering.
Published November 9, 2026. This article is for general information and isn't financial, legal or tax advice. Terms vary by lender and state. We may be compensated by companies featured on this site. See our advertiser disclosure.