Can a Reverse Mortgage Eliminate My Monthly Mortgage Payment?

A reverse mortgage—specifically a Home Equity Conversion Mortgage (HECM)—can eliminate your monthly mortgage payments by allowing you to use your home’s equity to pay off your existing loan and access additional funds, if eligible. Once your current mortgage is paid off with the reverse mortgage proceeds, you’re no longer required to make monthly payments toward a mortgage. Instead, the loan is repaid when the home is sold, the last borrower moves out permanently, or passes away.

But here’s the key:

With a reverse mortgage, your home is essentially making the mortgage payments for you. Rather than you writing a check each month, the interest and fees are added to the loan balance over time. This means your equity decreases gradually as the loan balance grows—a concept known as negative amortization.

The loan accrues compound interest, meaning that each month, interest is charged not just on the original amount borrowed but also on the interest that was added in previous months. This is how the balance increases over time—without you ever having to make a monthly payment.

Here’s how it helps you:

• You eliminate your monthly mortgage payment, often freeing up a significant amount of cash each month.

• You retain ownership of your home and continue to live in it as your primary residence.

• You only repay the loan when you leave the home, giving you financial flexibility and peace of mind in retirement.

As long as you keep up with basic responsibilities—like paying your property taxes, homeowners insurance, and maintaining the home—you can stay in your home for as long as you like, payment-free.

A reverse mortgage shifts the responsibility of the monthly payment from you to your home, using the equity you’ve built over the years to support your retirement now—without draining your monthly budget.

Learn more about eligibility requirements for a reverse mortgage, situations where a reverse mortgage is best used, and common myths around reverse mortgage that we debunk with facts