Homeowners 62+: How to Compare Reverse Mortgage Options in 2026

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For many homeowners approaching or already in retirement, their house is one of their largest financial assets.

The challenge is that home equity doesn't automatically help pay monthly bills.

A reverse mortgage is one way eligible homeowners can convert a portion of that equity into usable funds while continuing to live in their home. But reverse mortgages aren't all the same—and comparing your options before choosing a lender can make a significant difference.

Here's what homeowners should know before getting started.

What Is a Reverse Mortgage?

A reverse mortgage is a type of home loan designed primarily for older homeowners.

The most common type is the Home Equity Conversion Mortgage (HECM), which is available to qualifying homeowners age 62 and older.

Instead of making required monthly mortgage payments to a lender, eligible homeowners can receive proceeds from their home's equity. Interest and fees are added to the loan balance over time, so the amount owed generally increases rather than decreases.

Depending on the loan and borrower, proceeds may be available as:

• A lump-sum payment
• Monthly payments
• A line of credit
• A combination of payment methods

The homeowner keeps title to the property.

However, homeowners are still responsible for property taxes, homeowners insurance, maintenance and other applicable property expenses. The home must also generally remain the borrower's primary residence.

Why Some Retirees Consider a Reverse Mortgage

A reverse mortgage isn't simply about getting cash from a house.

For some homeowners, it can be a way to make the equity they've accumulated over many years more useful during retirement.

Homeowners may consider using the proceeds to:

• Supplement retirement income
• Pay off an existing mortgage
• Cover everyday expenses
• Make home repairs or accessibility improvements
• Establish an additional financial cushion
• Pay unexpected expenses
• Remain in their current home longer

Because reverse mortgage proceeds are loan proceeds rather than income, they're generally not treated as taxable income.

The Important Part: Compare Your Options

Reverse mortgages can have different interest rates, lender fees, available proceeds and product features.

That's why homeowners shouldn't necessarily accept the first reverse mortgage offer they receive.

When comparing options, pay particular attention to these five areas.

1. How Much Equity You Can Access

The amount available isn't simply based on the total value of your house.

For an FHA-insured HECM, factors can include your age, current interest rates, the home's value and applicable lending limits.

Two homeowners with similarly valued properties could therefore receive different estimates.

2. Interest Rates

Even though a reverse mortgage generally doesn't require monthly principal-and-interest mortgage payments, interest still accumulates.

That means the interest rate can have a meaningful impact on how quickly the loan balance grows.

Comparing lenders may help homeowners identify more competitive terms.

3. Upfront Costs

Reverse mortgages can include expenses such as:

• Origination fees
• Appraisal costs
• Closing costs
• Mortgage insurance on HECMs
• Other third-party charges

HECM loans also include FHA mortgage insurance.

Ask each lender to clearly explain the total estimated costs rather than focusing only on the amount of money available.

4. How You'll Receive the Money

Depending on the reverse mortgage selected, homeowners may have several ways to access their funds.

Someone looking for an emergency reserve might prefer a line of credit, while another homeowner may want predictable monthly distributions.

The right structure depends on how you expect to use the money.

5. Lender Experience and Service

Reverse mortgages have more specialized rules than many traditional mortgages.

When comparing lenders, consider factors such as product availability, rates, costs, reputation, geographic availability and customer service.

Finding an experienced reverse mortgage lender can be especially valuable when you're trying to understand your choices.

Reverse Mortgage Pros

There are several reasons eligible homeowners explore reverse mortgages.

No required monthly mortgage payments

Borrowers generally aren't required to make monthly principal-and-interest mortgage payments while they meet the loan's requirements.

Stay in your home

The homeowner retains title and can continue living in the property.

Access accumulated home equity

Homeowners can turn a portion of an otherwise illiquid asset into funds they can use.

Flexible ways to receive proceeds

Depending on the type of reverse mortgage, options may include monthly distributions, a line of credit or a lump sum.

HECM borrower protections

HECMs include federal requirements and borrower protections, and applicants must complete counseling with a HUD-approved reverse mortgage counseling agency before obtaining the loan.

Reverse Mortgage Cons

There are also important tradeoffs.

Your loan balance generally grows

Interest and applicable fees are added to the balance rather than being paid down each month.

Your home equity decreases

Using home equity today generally means leaving less equity in the property later.

You still have homeowner expenses

Property taxes, homeowners insurance and home maintenance remain your responsibility.

Failing to meet these obligations can cause the loan to become due and potentially place the home at risk of foreclosure.

The loan eventually has to be repaid

A reverse mortgage generally becomes due when the borrower sells the property, permanently moves away or dies.

Heirs who want to keep the property generally need another way to repay the loan.

Who Might Want to Consider One?

A reverse mortgage may be worth exploring if:

• You're 62 or older
• You have significant equity in your home
• You expect to remain in the home
• You want additional retirement cash flow
• You can continue paying property taxes, insurance and maintenance
• You understand that borrowing reduces the equity remaining in your home

It may be less attractive if you expect to move soon, have difficulty covering ongoing property expenses or consider preserving as much home equity as possible for your heirs a top priority.

Reverse Mortgage vs. HELOC

A reverse mortgage isn't the only way to access home equity.

A home equity line of credit, or HELOC, can also allow homeowners to borrow against their property.

The major difference is repayment.

HELOCs generally require monthly payments and typically involve income and credit qualification. A reverse mortgage generally doesn't require monthly principal-and-interest mortgage payments while the borrower continues meeting the requirements of the loan.

For some homeowners, a HELOC may cost less.

For others, eliminating the need for another required monthly mortgage payment may be more important.

It's worth comparing both.

Before You Choose a Reverse Mortgage

Don't make the decision based solely on an advertisement or a single lender quote.

Ask:

• How much could I potentially access?
• What interest rate am I being offered?
• What are the total upfront costs?
• Are there ongoing fees?
• What happens if I move?
• How could this affect my spouse or heirs?
• Would a HELOC, home equity loan, downsizing or another option make more sense?

HUD-approved reverse mortgage counseling is required for HECMs and is specifically designed to help homeowners understand questions like these before moving forward.

See What Reverse Mortgage Options May Be Available

Your home may represent decades of mortgage payments and accumulated equity.

If you're 62 or older, it may be worth finding out how much of that equity you could potentially access and what options are available based on your age, property and financial situation.

Checking your options can help you understand what's available before deciding whether a reverse mortgage makes sense for you.

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This content is for informational purposes only and is not financial, tax or legal advice. A reverse mortgage is a loan and may not be appropriate for every homeowner. Borrowers remain responsible for applicable property taxes, homeowners insurance, maintenance and other property charges. HECM borrowers must meet eligibility requirements and complete HUD-approved counseling.

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