Reverse mortgage
Definition
A reverse mortgage is a loan that lets an eligible older homeowner borrow against home equity. Instead of a traditional monthly principal-and-interest payment to the lender, the borrower typically receives funds and the balance can grow. Most reverse mortgages today are Home Equity Conversion Mortgages.
In plain English
A forward mortgage is repaid with monthly principal and interest. A reverse mortgage works in the other direction: the homeowner draws on equity, and repayment is usually delayed until a later event such as sale or the end of occupancy. HECM is the common FHA form. It is a program name, not a second product page. This page does not state an age rule as legal advice.
Technical definition
CFPB defines a reverse mortgage as a loan that lets an eligible older homeowner borrow against equity, notes that the balance can grow, and states that most reverse mortgages today are HECMs. Age and program details remain program context.
Why it matters
Home-equity loans and reverse mortgages both use equity. Only one is designed so the borrower does not make a traditional P&I payment.
Commonly confused with
Sources reviewed
Mortgage key terms
ObservedSeptember 4, 2026
Important note
HECM is a common program form of this concept, not a second product page. This page does not advise anyone to take a reverse mortgage.