Reverse Mortgages: How They Work, Who Qualifies and What They Cost

The main kinds

• Home Equity Conversion Mortgage (HECM). The most common reverse mortgage. The rules on this page are HECM rules.
• Proprietary reverse mortgages. Offered by some lenders on their own terms, typically designed for borrowers with higher home values.

How it works

Instead of you paying the lender, the lender pays you: as monthly payments for a set term or for as long as you live in the home, as a line of credit, as a mix of those, or, with a fixed rate, as one lump sum. The title stays in your name, and so do the home's bills: property taxes, homeowners insurance, HOA dues and upkeep. Each month, interest and fees are added to what you owe, so the balance grows and your equity shrinks. More on how a reverse mortgage works.

Who qualifies

The youngest borrower has to be 62 or older, and HUD-approved counseling is required before a lender can process your HECM application. The home has to be your principal residence, and any existing mortgage is paid off at closing, from your own money or from the loan. You can't have unresolved delinquent federal debt that the loan doesn't pay off. The lender runs a financial assessment of your ability to keep paying the home's bills, and each lender makes its own approval decision. See reverse mortgage requirements.

What you can borrow depends on

The age of the youngest borrower or eligible non-borrowing spouse, current interest rates and the home's value. Any existing mortgage is paid from that amount first, so the more you owe, the less is left for you.

What it costs

Upfront, an origination fee, an initial mortgage insurance premium and third-party closing costs. Ongoing, interest, an annual mortgage insurance premium and any servicing fee, all added to the balance. The CFPB says reverse mortgages are typically more expensive than other home loans, so ask each lender for every cost in writing. See what a reverse mortgage costs and the pros and cons.

When it's repaid

The loan comes due when the last borrower dies, sells the home or moves out for good, including after more than 12 months in a row in a care facility, and sooner if the taxes, insurance or upkeep fall behind. A spouse who isn't a borrower but is named in the loan as an eligible non-borrowing spouse may be able to stay after the borrower dies or spends more than 12 months in a row in a care facility; they don't receive loan money, and it isn't a right to stay if the borrower moves out for other reasons. On a HECM, heirs who want to keep the home can pay the balance or 95% of the appraised value, whichever is less, and the same lower amount settles the loan if they sell; mortgage insurance covers any shortfall. See what happens when you die or move.

Compared with other ways to use your equity

A HELOC or home equity loan usually means monthly payments and qualifies on income and credit, and the CFPB says it can be cheaper. A reverse mortgage has no monthly mortgage payment, but the home's bills continue and the balance grows. See reverse mortgage vs HELOC vs home equity loan.

Refinancing

A HECM can be refinanced into a new HECM on the same home, after the lender shows you the cost of the refinance next to how much more you could borrow. It can also be paid off at any time without a penalty. See refinancing a reverse mortgage and getting more equity when you already have one.

Reverse mortgages in 2025, by the numbers

Lenders reported 31,826 reverse mortgages originated in 2025 in the federal HMDA data. For 52% of them the main applicant was over 74, and for 40% the main applicant was 65 to 74. The most were in California (7,315), Florida (2,954), Texas (2,131), Arizona (1,452), Colorado (1,324) and Washington (1,287). These counts are what lenders reported for originated loans, not FreeRateUpdate's own figures.

Frequently asked questions

What is the minimum age for a reverse mortgage?

For a HECM, the youngest borrower has to be 62 or older. A younger spouse can be named as a non-borrowing spouse.

Is counseling required?

Yes, for a HECM. HUD-approved counseling is required before a lender can process your HECM application. You can find a HUD-approved counselor through HUD's counselor roster or by calling (800) 569-4287.

Do you still own your home with a reverse mortgage?

Yes. The title stays in your name, and you keep paying property taxes, homeowners insurance, any HOA dues and upkeep.

Do you make monthly payments on a reverse mortgage?

You don't make monthly mortgage payments while you live in the home. Interest and fees are added to the balance instead, and you still pay property taxes, insurance, HOA dues and upkeep.

When does a reverse mortgage have to be repaid?

When the last borrower dies, sells the home or moves out for good, or if the property taxes, insurance or upkeep aren't kept up, or the home stops being the principal residence. An eligible non-borrowing spouse may be able to stay after the borrower dies or spends more than 12 months in a row in a care facility.

Can you cancel a reverse mortgage after closing?

With most reverse mortgages, you have three business days after closing to cancel for any reason, in writing, without penalty.

Does the VA offer reverse mortgages?

No. The CFPB warns that ads promising veterans special reverse mortgage deals or implying VA approval can be scams.