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Short answer
A reverse mortgage, most often a Home Equity Conversion Mortgage (HECM), is only for homeowners 62 and older; you make no monthly mortgage payments, so interest and fees are added to the balance and it grows over time, and the loan is usually repaid by selling the home when you no longer live there. A HELOC is open to qualifying homeowners of any age, but you make monthly payments on what you draw, usually at a variable rate. With either one you must keep paying property taxes and insurance, so compare how long you plan to stay in the home and whether you can afford a monthly payment.
| Feature | Reverse mortgage (HECM) | HELOC |
|---|---|---|
| Age | 62 or older | No age rule; must qualify with the lender |
| Monthly mortgage payments | None required | Yes, on what you draw |
| Loan balance over time | Grows as interest and fees are added | Goes down as you repay |
| Your equity | Decreases over time | Rises as you repay |
| When it is repaid | When you no longer live in the home, usually by selling | Over the repayment period, and often when you sell |
| What you must keep paying | Property taxes, homeowners insurance, upkeep | Property taxes, insurance, and the HELOC payment |
| Interest rate | Varies by loan | Usually variable |
| Right to cancel | Three business days after closing (most reverse mortgages) | Generally three business days after signing |
The CFPB describes a HECM, the most common type of reverse mortgage, as a special type of home loan only for homeowners who are 62 and older. Like a traditional mortgage, it uses your home as security and the title stays in your name. Unlike a traditional mortgage, borrowers do not make monthly mortgage payments.
Because no payments are required, interest and fees are added to the loan balance each month and the balance grows. As the balance increases, your home equity decreases. The loan is repaid when the borrowers no longer live in the home, and the CFPB notes that the homeowners or their heirs will eventually have to pay it back, usually by selling the home.
You still have obligations. With a reverse mortgage, homeowners are required to pay property taxes and homeowners insurance and to use the property as their home, and the CFPB guide notes you may be required to keep up with repairs.
A HELOC is an open-end line of credit that lets you borrow repeatedly against your home equity during a draw period, which could last 10 years, for example. HELOCs usually have a variable interest rate, and you make monthly payments. The CFPB notes that payments are often significantly higher once you enter repayment, and that if you fall behind, you could lose your home.
The CFPB stresses that a reverse mortgage is a loan that must be repaid, and that the balance rises each month. It also cautions homeowners to beware of contractors who suggest a reverse mortgage to pay for repairs, and notes that the Department of Veterans Affairs does not offer reverse mortgages, despite some ads that imply it. Before deciding, talk with a HUD-approved reverse mortgage counselor; the CFPB lists (800) 569-4287 to find one.
A reverse mortgage is often worth a close look if:
A HELOC is often worth a close look if:
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A Home Equity Conversion Mortgage, the most common type of reverse mortgage, is only for homeowners who are 62 and older. You must also keep paying property taxes and homeowners insurance and live in the home.
No monthly mortgage payments are required. Instead, interest and fees are added to the loan balance each month, so the balance grows and your equity decreases.
When the borrowers no longer live in the home. The CFPB notes that homeowners or their heirs usually repay it by selling the home.
Yes. You make monthly payments on what you draw, and the CFPB notes that payments are often significantly higher once the repayment period starts.
The CFPB says that with most reverse mortgages, you can cancel within three business days after closing for any reason, without penalty, by notifying the lender in writing.
No. The CFPB notes that the Department of Veterans Affairs does not offer reverse mortgage loans, and warns about ads that imply VA approval.
This page is general education, not a loan offer, commitment, or approval. Program rules and figures change; the figures here were checked against the sources below in October 2026. Your options depend on your credit, income, property, and each lender's guidelines. All loans are subject to approval.
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This page explains the rules. For your situation, compare options yourself or talk with a licensed loan officer.