Reverse Mortgages are Expensive

Truth: While reverse mortgages come with upfront costs, they’re often comparable to — or even more affordable than — traditional mortgages, especially when you factor in what you get in return: no monthly payments, access to tax-free cash, and long-term financial flexibility.

Let’s break down the reality: 

Yes, reverse mortgages do have some upfront costs — things like: 

• FHA mortgage insurance

• Origination fees

• Closing costs (just like a traditional loan)

• Third-party expenses like appraisal and title fees

But here’s what often gets overlooked:
A reverse mortgage gives you access to your home equity without having to sell your home or take on monthly mortgage payments. That benefit alone can save you thousands over the life of the loan — and it frees up income that would’ve gone toward a mortgage every month.

Consider this:

You’re eliminating your current mortgage payment, if you still have one

You can use the loan proceeds to pay for essential needs like medical expenses, home improvements, or long-term care

You’re gaining access to tax-free cash that can be used however you choose

You won’t repay the loan until you move out, sell the home, or pass away

Many homeowners are surprised to learn that the net cost of a reverse mortgage is actually very reasonable, especially when they’re no longer making monthly payments and have more freedom with their retirement income. For those on a fixed income or dealing with rising living costs, the tradeoff can be well worth it.

Reverse mortgages are not “too expensive” when you consider the full picture — they’re an investment in long-term financial flexibility, peace of mind, and aging in place. Like any financial product, they should be reviewed carefully, but for the right homeowner, they’re a smart and cost-effective option.

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