If you're 60 or older and looking to tap into the equity in your home, a reverse mortgage could be a flexible way to access extra funds without having to sell or downsize. This unique loan allows you to unlock the cash value of your property while continuing to live in your home without the burden of making ongoing repayments to the lender, as long as you're still living there.

How Does a Reverse Mortgage Work?

• No Repayments While You Live in Your Home: One of the biggest advantages of a reverse mortgage is that you won't have to make regular loan repayments. The loan, along with any interest, only becomes due when you sell the property or after you pass away and your estate settles the sale.
• Compound Interest Over Time: Keep in mind that, although you’re not required to make payments during your lifetime, interest is still accruing and will compound over time. This means when your home is eventually sold, the total loan balance plus interest will need to be repaid.
• Borrow More as You Age: The older you get, the more of your home’s value you can borrow. For example, at age 60, you might be eligible to borrow up to 15–20% of your home’s value, with this figure increasing by approximately 1% for each year over 60.

A reverse mortgage is a powerful financial tool for homeowners later in life, but it’s crucial to weigh the pros and cons based on your unique situation. With the right guidance and careful planning, it could provide the cash flow you need while allowing you to stay in your home and live more comfortably.