Can a Reverse Mortgage Help With Healthcare Costs?

Yes, a reverse mortgage can help with healthcare costs by tapping your home equity to cover expenses like medical bills, in-home care, or long-term care premiums—without monthly repayment pressure. It’s a way to fund health needs without draining your savings or income, especially if you’re facing rising costs in retirement. You can use a standard reverse mortgage to stay in your home and pay for care, or even an HECM for Purchase to move to a healthcare-friendly location, keeping your finances flexible.

How It Helps

• • Cash Access: Take a lump sum for big bills (e.g., surgery), monthly payments for ongoing care (e.g., aides), or a credit line for unpredictable costs (e.g., medications)—your choice.
  • No Monthly Payments: The reverse mortgage doesn’t add a new bill, so your Social Security or pension can focus on living costs, not loan repayments.
  • Debt Relief: Pay off existing medical debt, cutting monthly outflows and stress.

Mechanics

• • Eligibility: You’re 62+, own your home (with enough equity), and it’s your primary residence. Taxes, insurance, and upkeep stay on you.
  • Amount: Based on your age (older gets more), home value, and rates—enough equity can cover substantial costs.
  • Repayment: Settled when you sell, move out permanently, or pass away, typically via the home’s sale—not your other assets.

Healthcare Scenarios

• • In-Home Care: Fund $2,000/month for a caregiver instead of dipping into savings.
  • Big Bills: Pay a $30,000 hospital stay upfront, avoiding high-interest loans.

Trade-Offs

• • Equity Trade: The loan grows, reducing your home’s value—less for heirs or future needs.

Quick Example

• • You’re 70, with a $400,000 paid-off home and $20,000 in medical debt ($400/month payments). A reverse mortgage gives $180,000—$20,000 clears the debt, $160,000 as a credit line for future care (e.g., $1,500/month aide). Your $2,000 income, freed from $400 payments, covers taxes/insurance ($500/month) and life with $1,500 left—no savings hit.

Does It Fit?

• • It’s a fit if healthcare’s eating your budget and you’ve got equity to spare. It’s about covering costs now, not building wealth. Want a story with this—maybe your specific health needs?

Reverse mortgages can be a useful financial tool for eligible seniors looking to supplement income, pay for healthcare, or cover living expenses, but they also come with complexities that should be thoroughly understood before proceeding.

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