Reverse Mortgage vs HELOC vs Home Equity Loan
All three let you borrow against your home's equity. A HELOC and a home equity loan usually come with monthly payments and qualify on your income and credit, and the CFPB says they can be a cheaper way to borrow. A reverse mortgage, for homeowners 62 and older who complete HUD-approved counseling, has no monthly mortgage payment, but you keep paying property taxes, insurance, HOA dues and upkeep, interest and fees build up in the balance, and it typically costs more than other home loans.
Last updated October 22, 2026Side by side
| Reverse mortgage (HECM) | HELOC | Home equity loan | |
|---|---|---|---|
| Who can get one | Youngest borrower 62 or older, living in the home, after HUD-approved counseling | Homeowners who qualify on income and credit | Homeowners who qualify on income and credit |
| Monthly mortgage payment | None while you live in the home; taxes, insurance, HOA dues and upkeep continue | Usually yes | Usually yes |
| How the balance moves | Grows as interest and fees are added | Rises with draws, falls as you repay | Falls as you repay |
| How you get the money | Monthly payments, a line of credit, a mix, or a lump sum (fixed rate) | A line you draw on | One lump sum |
| When it's repaid | When the last borrower dies, sells or moves out for good, or stops keeping up the home's bills | On the loan's schedule | On the loan's schedule |
| Required first | HUD-approved counseling before the application is processed, then a financial assessment | The lender's underwriting | The lender's underwriting |
| Mortgage insurance | An upfront and an annual premium, added to the balance | Not part of the loan | Not part of the loan |
How they differ in practice
Paying it back. With a HELOC or home equity loan you make payments, and the balance comes down as you pay. With a reverse mortgage you make no monthly mortgage payments, though property taxes, insurance, HOA dues and upkeep continue; the balance goes up, and the loan is usually repaid by selling the home when the last borrower leaves.
Qualifying. A HELOC or home equity loan depends on your income and credit. A reverse mortgage still has a financial assessment, but it centers on whether you can keep paying property taxes, insurance and upkeep, and it requires counseling first.
Cost. The CFPB describes a home equity loan or HELOC as possibly cheaper, while a reverse mortgage is typically more expensive than other home loans. A HECM's upfront costs include an origination fee, an initial mortgage insurance premium and closing costs; see what a reverse mortgage costs.
What you'd owe at the end. A HECM is repaid from the home, and if the balance passes the home's value, you or your heirs won't owe more than the home is worth. A HELOC or home equity loan is repaid on its terms, whatever the home is worth.
What stays the same. With all three you keep the title, and you keep paying property taxes, insurance and upkeep.
Comparing a HELOC and a home equity loan
For how a HELOC, a home equity loan and a cash-out refinance compare with each other, including rates and how the money is drawn, see HELOC vs home equity loan vs cash-out refinance.
| Monthly mortgage payment | HELOC and home equity loan: usually yes. Reverse mortgage: none while you live there, but taxes, insurance, HOA dues and upkeep continue |
|---|---|
| Qualifying | HELOC and home equity loan: income and credit. Reverse: age 62+, counseling, financial assessment |
| Balance over time | Reverse mortgage balance grows; the others fall as you repay |
| Typical cost | Reverse mortgages typically cost more than other home loans (CFPB) |
| Ask for | Every rate, fee and cost in writing, from each lender |
Related questions
Sources
- https://www.consumerfinance.gov/ask-cfpb/can-anyone-take-out-a-reverse-mortgage-loan-en-227/
- https://www.consumerfinance.gov/ask-cfpb/how-much-does-a-reverse-mortgage-loan-cost-en-237/
- https://www.consumerfinance.gov/ask-cfpb/what-is-a-reverse-mortgage-en-224/
- https://www.consumerfinance.gov/ask-cfpb/what-happens-if-my-reverse-mortgage-loan-balance-grows-larger-than-the-value-of-my-home-en-1217/
- https://www.ecfr.gov/current/title-24/subtitle-B/chapter-II/subchapter-B/part-206
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.