Can You Refinance a Reverse Mortgage?
Yes. A Home Equity Conversion Mortgage (HECM) can be refinanced into a new HECM on the same home, and before you go ahead the lender has to give you its estimate of what the refinance will cost and how much more you could borrow. You can also pay a HECM off at any time, in full or in part, with no prepayment penalty, for example with a traditional mortgage or by selling the home.
Last updated October 22, 2026Refinancing into a new HECM
A new HECM can pay off an existing one, as long as the home securing it stays the same. The new loan has to meet every requirement of a first HECM, including the age rule, counseling unless it's waived, and the financial assessment. What it can make available depends again on the youngest borrower's age, current interest rates and the home's value. The obligations carry over too: property taxes, insurance, HOA dues and upkeep stay yours, and the new balance grows the same way.
The new loan carries the same obligations: you keep paying property taxes, homeowners insurance and any HOA dues and maintain the home, the balance keeps growing, and the loan can come due if those fall behind.
The cost-versus-gain estimate
The rules require the lender to give you two estimates alongside your other disclosures:
- the total cost of the refinance, meaning the allowed fees and closing costs plus the upfront mortgage insurance premium, and
- the increase in your principal limit, meaning how much more the new loan could make available than your current one.
Putting those two numbers side by side shows whether the extra borrowing power is worth what the refinance costs.
Credit for the premium you already paid
The upfront mortgage insurance premium on the new HECM is reduced by the upfront premium you paid on the one being refinanced. If you paid more the first time than the new loan calls for, there's no refund. This credit doesn't apply if you use a HECM to buy a different home.
Counseling on a refinance
Counseling is normally required, and you can skip it only when all of these are true:
- the original HECM got its case number on or after August 4, 2014 and you were counseled then, or it's older and there's no non-borrowing spouse,
- you've received the cost-versus-gain estimate,
- the gain beats the cost by at least the amount the rules set, and
- you apply within five years of closing on the original HECM.
Paying it off instead
A HECM can be repaid in full or in part at any time with no charge or penalty. If you'd rather move to a regular mortgage, its lender pays off the reverse mortgage at closing, and from then on you'd make monthly payments on the new loan. Selling the home also pays it off, and you keep whatever is left after the balance is repaid.
Already have a reverse mortgage and want more?
A HECM has to be the first lien on the home, so you can't add a second HECM on top of one. For the options, see getting more equity when you already have a reverse mortgage.
| Allowed? | Yes, on the same home |
|---|---|
| Before you commit | Lender's estimate of total cost and of the increase in your principal limit |
| Upfront premium | Reduced by the premium paid on the old loan; no refund of any excess |
| Counseling | Required unless every waiver condition is met |
| Prepayment penalty | None; pay off in full or in part at any time |
Related questions
Sources
- https://www.ecfr.gov/current/title-24/subtitle-B/chapter-II/subchapter-B/part-206
- https://www.hud.gov/hud-partners/single-family-hecmhome
- https://www.consumerfinance.gov/ask-cfpb/how-much-does-a-reverse-mortgage-loan-cost-en-237/
Sourced from licensed loan officers and brokers in the FreeRateUpdate network.
Educational information only, not individualized financial or legal advice. Program details and rates change; verify current terms with a licensed loan officer before making a decision.