Can a Reverse Mortgage Help Pay Off My Existing Debt?

Yes, a reverse mortgage can absolutely help pay off your existing debt—and for many retirees, that’s one of its most powerful benefits.

If you’re 62 or older and own your home (or have significant equity), a Home Equity Conversion Mortgage (HECM) allows you to access a portion of that equity as tax-free funds—without having to sell your home or take on monthly mortgage payments.

Here’s how it can help pay off your debt:

• Eliminate your current mortgage: If you still have a traditional mortgage, a reverse mortgage can pay off the remaining balance. This alone can free up hundreds or even thousands of dollars each month.

• Pay off high-interest debt: You can use reverse mortgage proceeds to pay off credit cards, personal loans, medical bills, or other outstanding debts, reducing or eliminating those monthly payments and the burden of compounding interest.

• No required monthly mortgage payments: Unlike other loan options, you don’t have to make monthly payments on a reverse mortgage. That means you can reduce your overall monthly financial obligations, improving your cash flow and easing financial stress.

• Stay in your home: You remain the owner of your home and can continue living in it as long as it’s your primary residence and you keep up with property taxes, homeowners insurance, and basic maintenance.

By using your home equity strategically, you can eliminate debt, protect your retirement savings, and breathe easier financially—all while staying in the comfort of your own home.

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