retirement house couple
Reverse mortgages allows owners to release the equity in their home. Image – Canva.
  • Only a few lenders offer reverse mortgages
  • Should be aware of risks, such as interests and costs liable when the mortgage is discharged
  • Interest payable will be added to the loan amount together with the costs after your death

A reverse mortgage is one when no payments are required.

Basically, the payment is made on your death on the sale of your property. It should be noted only a few lenders provide this type of loan

If you are unable to obtain a traditional mortgage whereby you would make monthly repayments (or do not wish to use that method of finance) a reverse may suit you

The lender will value your property to ensure there is equity to cover the loan plus interest and costs so there will be sufficient funds to repay the loan.

The lender will advance the money in terms of a reverse mortgage, and you do not have to make any repayments on the property until it is either sold or on your death. You can make payments if you wish.

You should carefully consider whether this type of finance is suitable for you, and you are aware of the risks

The lender will charge interest and costs on the loan and you will be liable to repay on discharge of the mortgage.  The interest may be more than the current interest rates

You are obliged to insure the property and keep it in a good condition

You are obliged to adhere to all the Bank’s requirements set out in the loan document

The interest payable will be added to the loan amount together with the costs after your death

Some reasons why reverse mortgages are used

To renovate your home to make it more accessible if you need a wheelchair

To buy a caravan or  travel

To fund a medical procedure

You should not sign any documents without seeking financial and legal advice

If in doubt, don’t use this method – borrow from family.


Before making any decision, please do your own independent research, taking into account your own situation. This article does not purport to provide financial, legal or investment advice. See our Terms of Use.

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