The ledger
| In favour | Against |
|---|---|
| The mortgage payment stops. For most borrowers this is worth more than the cash. | It costs $15,000–$25,000 upfront. Financeable, but you pay interest on it for the life of the loan. |
| You keep the title and can sell, refinance or leave the home to your children at any time. | The balance compounds. At around 7% the debt roughly doubles every decade. Over a long tenure it can consume most of the equity. |
| Non-recourse. Neither you nor your heirs can ever owe more than the home sells for. | You can still default — on property taxes, insurance, upkeep or occupancy. This is what actually costs people their homes. |
| No income or credit test in the conventional sense. A financial assessment, not a debt-to-income ratio. | Less to inherit. If leaving the house unencumbered is the priority, this works against it. |
| The line of credit grows and cannot be frozen. The single most underrated feature in the category. | Moving early is expensive. Under about five years the upfront costs will not have earned back. |
| Proceeds are not taxable income and do not affect Social Security or Medicare. | Medicaid and SSI can be affected if proceeds sit in your account at month end. |
| Tenure payments continue for life, even past the point where you have drawn more than the house is worth. | It is complicated, and complicated products are where people get taken advantage of. |
Which column wins depends on one question
Not your age, not your home's value, not the rate. How long do you intend to stay in this house?
Over fifteen or twenty years the upfront costs amortise into irrelevance and the payment relief compounds in your favour every single month. Over three years you have paid roughly $20,000 for a bridge you did not need. The same loan, the same borrower, opposite verdicts — and the only variable that moved was time.
Everything else on this page is secondary to that.
The honest failure rate
Roughly half the people who call us should not take a reverse mortgage. Usually because they may move within a few years, occasionally because a conventional refinance would cost them far less, sometimes because the thing they actually need is to sell. That is not modesty — it is what the arithmetic says, and you should expect to hear it if it applies to you.
The pro that gets overlooked
Almost every article on this subject frames a reverse mortgage as a last resort. The most deliberate users of the product treat it as the opposite: a standby line of credit opened early and left alone, growing at the loan's rate every year, uncancellable, drawn on only in years when selling investments would mean selling at a loss.
That use case has nothing to do with running out of money. It is a portfolio-sequencing tool, and the people using it that way often have seven-figure net worths and no need for the cash at all.
The con that gets understated
Compounding. It is easy to write “the balance grows over time” and hard to feel it. Borrow $200,000 at 70, stay in the house to 90, and the payoff can approach $800,000. If the home appreciates at a similar rate the equity holds up. If it does not, most of it is gone.
For someone who needed the money and intended to stay, that is a fair trade knowingly made. For someone who took the maximum because it was offered, it is a bad outcome that was entirely foreseeable. The full downside case is here, written without hedging.
So is it a good idea?
For a narrow set of situations, genuinely yes. For most people, no. We built a page that walks through the actual scenarios rather than answering that question with “it depends” and a contact form.
What this estimate is, and what it is not
These figures are an illustration for planning only — not a loan offer, not a commitment to lend, and not a guarantee of what you will receive. Your real numbers depend on a completed appraisal, the expected interest rate on the day your FHA case number is assigned, your existing mortgage payoff, and a HUD financial assessment. A reverse mortgage is a loan that must be repaid, not a government benefit. You remain responsible for property taxes, homeowners insurance and upkeep, and the loan can become due if you stop meeting those obligations.