How do you pay back a reverse mortgage?

You don't make monthly payments. The full balance — principal plus accrued interest and fees — becomes due when the last borrower sells the home, moves out permanently, or dies. It is most often repaid by selling the home; heirs can also keep it by paying off the balance or 95% of the appraised value, whichever is less.

How much money can you get from a reverse mortgage?

The maximum, called the principal limit, depends on the youngest borrower's age, the expected interest rate, and the home's value capped at the 2026 HUD limit of $1,209,750. Older borrowers and lower rates yield more. Roughly speaking, a borrower in their late 60s to 70s can access about 40%–55% of the home's value before costs.

Do you still own your home with a reverse mortgage?

Yes. You keep the title and remain the owner. The lender simply holds a lien for the loan balance, which is settled when the loan comes due.

How a reverse mortgage works

Reviewed by the HomeEquityWise Editorial Team · Last updated May 2026 · How we calculate these numbers

A reverse mortgage lets a homeowner aged 62+ borrow against home equity and receive the money as a lump sum, monthly payments, or a line of credit — with no required monthly mortgage payment. Instead of you paying down a balance, interest is added to it, so the balance grows over time. The loan is repaid only when the last borrower sells the home, moves out for more than 12 months, or passes away — almost always from the sale of the home. You keep the title the entire time; you must keep paying property taxes, insurance, and upkeep.

Who qualifies: youngest borrower 62+, home is your primary residence, HUD counseling completed.
What you get: a lump sum, monthly income, a growing line of credit, or a mix.
No monthly payment — but taxes, insurance, and maintenance are still on you.
Repaid later when you sell, move out 12+ months, or pass away — usually from the home sale.
See your estimated payout in the reverse mortgage calculator.

Step by step

The most common reverse mortgage is the FHA-insured Home Equity Conversion Mortgage (HECM). Here's the full lifecycle:

Confirm eligibility. The youngest borrower must be 62+, the home must be your primary residence, and you must complete independent HUD-approved counseling first.
Appraisal. The lender appraises the home. The value used is capped at the 2026 HUD limit of $1,209,750.
Principal limit. Your maximum payout is the capped value × a Principal Limit Factor (PLF) — set by the youngest borrower's age and the expected interest rate — minus costs and any existing mortgage that must be paid off first.
Choose your payout. Lump sum, fixed monthly payments, a line of credit (whose unused portion can grow), or a combination.
Live in the home. You make no monthly mortgage payment, but you must keep the home as your residence and stay current on property taxes, insurance, and maintenance.
Repayment. When the last borrower sells, permanently moves out, or passes away, the balance — principal + accrued interest + fees — comes due, typically settled by selling the home.

How the payout is calculated

Three inputs drive the number: the home's value (capped at $1,209,750 for 2026), the PLF (older age and lower expected rates produce a higher factor), and the costs and payoffs subtracted off the top. Older borrowers and lower rates mean more cash; a remaining mortgage must be cleared first, which reduces what's left.

Worked example

You're 72, your home is worth $500,000, and it's paid off. At today's expected rates the PLF for a 72-year-old is roughly 43%, putting the principal limit near $215,000. Subtract about $13,000 in financed upfront costs (FHA insurance, origination, closing) and you'd have roughly $202,000 available — as a lump sum, monthly draws, or a credit line. Wait a few years or see lower rates, and that figure rises. Because rates shift, run your details through the reverse mortgage calculator for a current estimate.

What it costs and how it's repaid

Expect an upfront FHA mortgage insurance premium of about 2% of the home value, a lender origination fee (capped at $6,000), plus appraisal, title, and closing costs — most of which are financed into the loan. An ongoing 0.5% annual insurance premium accrues on the balance. Because you make no payments, the balance grows. When the loan comes due, it's repaid from the home sale. Thanks to FHA's non-recourse protection, you or your heirs never owe more than the home is worth at sale; heirs who want to keep the home can pay off the balance or 95% of appraised value, whichever is less.

Frequently asked questions

How does a reverse mortgage work?

A homeowner 62+ borrows against equity and receives money as a lump sum, monthly payments, or a line of credit, with no required monthly payment. Interest is added to the balance, and the loan is repaid when the borrower sells, moves out 12+ months, or passes away — usually from the home sale.

How do you pay it back?

You don't make monthly payments. The full balance comes due when the last borrower sells, permanently moves out, or dies — most often repaid by selling the home. Heirs can keep it by paying the balance or 95% of appraised value, whichever is less.

How much can you get?

The principal limit depends on the youngest borrower's age, the expected rate, and the home value (capped at $1,209,750 in 2026). Older borrowers and lower rates get more — roughly 40%–55% of value for borrowers in their late 60s to 70s, before costs.

Do you still own your home?

Yes — you keep the title and stay the owner. The lender holds a lien for the balance, settled when the loan comes due.

Sources: CFPB — Reverse Mortgages · HUD — HECM program · our methodology. Educational only — not financial advice; confirm with a HUD-approved counselor.