A reverse mortgage is a type of home loan that allows homeowners age 62 and older to convert part of their home equity into cash while continuing to live in their home. The loan generally doesn't have to be repaid until the homeowner moves out, sells the home, or dies. The most common type of reverse mortgage is the Home Equity Conversion Mortgage  (HECM), which is insured by the Federal Housing Administration (FHA).

While a reverse mortgage can help some older adults boost their retirement income, it's not the right choice for everyone. In this guide, you'll learn about the latest reverse mortgage trends, how these loans work, and where to find more information.

The facts on reverse mortgages

Homeownership and reverse mortgage trends

• As of early 2026, more than 78% of Americans age 65 and older own their home.¹ The median home equity held by Americans age 65+ in 2025 was $250,000.²
• Nearly 1.4 million older homeowners have taken advantage of HECM loans to tap into their home equity since 1990.³
• The popularity of reverse mortgages has declined from a peak of over 119,000 borrowers in 2009. In the first half of 2026, 18,440 older homeowners initiated an HECM.³

A snapshot of reverse mortgage borrowers

• In FY2025, single women represented the largest group of HECM borrowers.4
• The vast majority of HECM borrowers are white (66.95%), followed by Black (6.84%) and Hispanic (4.56%) homeowners.⁴
• The average age at which people take reverse mortgages has remained relatively steady over the years, at just above 75.⁴

Reverse mortgages generally are not used for vacations or other "fun" things. Most borrowers use their loans for immediate or pressing financial needs, such as paying off their existing mortgage or other debts. Or they may consider these loans to supplement their monthly income, so they can afford to continue living in their own home longer.

How does a reverse mortgage work?

A reverse mortgage lets homeowners age 62 or older turn a portion of their home equity into cash without actually selling their home. Instead of making monthly payments to a lender, as with a traditional mortgage, the lender makes payments to the borrower. The loan is eventually repaid when the borrower sells, moves out, or passes away.

Borrowers can choose to receive reverse mortgage proceeds several ways:

• Lump sum: This is a single amount of money received when closing on the loan.
• Term: The value is paid out in equal monthly payments for a fixed term of months chosen by the borrower.
• Tenure: Similar to the term payment method, payments are disbursed in equal monthly amounts for the life of the loan.
• Line of credit: Like a home equity line of credit (HELOC), borrowers may take out any amount of money at any time until the line of credit is exhausted.

Taking out any home loan can be costly because of origination fees, servicing fees, and third-party closing charges such as an appraisal, title search, and recording costs. Most of these costs can be paid as part of the reverse mortgage loan.

In FY25, the majority of HECM borrowers opted use a line of credit when taking a reverse mortgage, mainly due to its flexibility.⁴

What should I consider before taking out a reverse mortgage?

Reverse mortgages are best used as part of a sound financial plan, not as a crisis management tool. Experts recommend that older homeowners interested in a reverse mortgage take time to consider all options before initiating a loan, including:

• Using a home equity line of credit (HELOC)
• Refinancing a current mortgage
• Downsizing
• Lowering expenses⁵

Reverse mortgage borrowers still must pay property taxes, insurance costs, and any condo/homeowners’ association fees. If these are not paid in a timely manner, the homeowner can face default on the loan and eventually foreclosure on their home.

Federal law requires that all people considering an HECM reverse mortgage receive counseling by a HUD-approved counseling agency. Telephone-based counseling is available nationwide, and face-to-face counseling is available in many communities. Learn more about reverse mortgage counseling. 

Reverse mortgage resources from NCOA 

The National Council on Aging (NCOA), through partnerships and resources, helps older adults explore how to use their home equity wisely.

NCOA has a long-standing partnership with GreenPath Financial Wellness–a nonprofit financial wellness organization approved by the U.S. Department of Housing & Urban Development (HUD) to assist older adults with a range of services to help save money. 

GreenPath offers reverse mortgage counseling to older homeowners. Counseling sessions last between one to two hours and follow a federally mandated protocol. The counselors can also assist clients with applying for benefits and finding local community services. To schedule a counseling session with GreenPath, call 1-800-550-1961 (toll-free).

To find a local HUD-approved counselor, visit https://entp.hud.gov/idapp/html/hecm_agency_look.cfm.

Use Your Home to Stay at Home©

NCOA’s Use Your Home to Stay at Home© is the official federally approved consumer booklet for older homeowners considering a reverse mortgage.

Sources

1.  U.S. Census Bureau. Quarterly Residential Vacancies and Homeownership, First Quarter 2026. April 28, 2026. Found on the internet at https://www.census.gov/housing/hvs/files/currenthvspress.pdf

2.  Investopedia. Average Home Equity for Retirees in 2025: Surprising Insights Revealed. December 30, 2025. Found on the internet at https://www.investopedia.com/average-home-equity-for-retirees-11862029

3.  National Reverse Mortgage Lenders Association. Annual HECM Production Numbers. Found on the internet at https://www.nrmlaonline.org/annual-hecm-endorsement-chart

4.  HUD. Annual Report to Congress Regarding the Financial Status of the Federal Housing Administration Mutual Mortgage Insurance Fund. Fiscal Year 2025. Found on the internet at https://www.hud.gov/sites/dfiles/Housing/documents/2025FHAAnnualReportMMIFund.pdf?

5.  CFPB. Can anyone take out a reverse mortgage? Found on the internet at https://www.consumerfinance.gov/ask-cfpb/can-anyone-take-out-a-reverse-mortgage-loan-en-227/