# Reverse mortgage (HECM)

> A reverse mortgage lets older homeowners borrow against home equity with no monthly loan payment; the balance is repaid when they sell, move out or die.

URL: https://mortgage-math-us.com/glossary/reverse-mortgage/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**A reverse mortgage** is a loan against your home equity that you don’t repay month by month: interest and fees are added to the balance, and the loan comes due when the last borrower dies, sells the home or no longer lives there. Most are Home Equity Conversion Mortgages (HECMs), insured by FHA and open to borrowers aged 62 years or older.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Youngest borrower must be at least | 62 years | [24 CFR 206.33](https://www.ecfr.gov/current/title-24/subtitle-B/chapter-II/subchapter-B/part-206/subpart-B) | Oct 7, 2026 |
| 2026 maximum claim amount | $1,249,125 | [HUD Mortgagee Letter 2025-22](https://www.hud.gov/sites/dfiles/hudclips/documents/2025-22hsgml.pdf) | 2026 limit |
| Initial mortgage insurance premium | 2% | [HUD Mortgagee Letter 2017-12](https://www.hud.gov/sites/documents/17-12ml.pdf) | Oct 2, 2017 |
| Annual mortgage insurance premium | 0.5% | [HUD Mortgagee Letter 2017-12](https://www.hud.gov/sites/documents/17-12ml.pdf) | Oct 2, 2017 |

## What you still have to pay

No loan payment doesn’t mean no costs. You must keep paying [property taxes](https://mortgage-math-us.com/glossary/property-tax/) and [homeowners insurance](https://mortgage-math-us.com/glossary/homeowners-insurance/), maintain the home and live in it as your main residence; falling behind can make the loan due and lead to [foreclosure](https://mortgage-math-us.com/glossary/foreclosure/). Before applying for a HECM you must meet a HUD-approved counselor.

## What a HECM costs

The FHA premiums are an initial 2% of the maximum claim amount — the home’s value up to the $1,249,125 limit — plus 0.5% a year on the balance. On a $400,000 home that’s $8,000 at closing; on a $150,000 balance, about $750 a year added to the loan. Origination fees and other closing costs come on top. Because a HECM is non-recourse, you or your heirs never owe more than the home is worth: if the balance is higher, heirs can settle by selling for at least 95% of the appraised value. The [reverse mortgages guide](https://mortgage-math-us.com/loan-types/reverse-mortgages/) covers payout options.

## Related terms

- [Home equity](https://mortgage-math-us.com/glossary/home-equity/)

## Sources

- [HUD Mortgagee Letter 2017-12](https://www.hud.gov/sites/documents/17-12ml.pdf) — HECM initial mortgage insurance premium (share of maximum claim amount); HECM annual mortgage insurance premium (share of balance) (Oct 2, 2017)
- [24 CFR 206.33](https://www.ecfr.gov/current/title-24/subtitle-B/chapter-II/subchapter-B/part-206/subpart-B) — HECM reverse mortgage: youngest borrower must be at least (Oct 7, 2026)
- [HUD Mortgagee Letter 2025-22](https://www.hud.gov/sites/dfiles/hudclips/documents/2025-22hsgml.pdf) — 2026 HECM maximum claim amount (2026 limit)
- [CFPB](https://www.consumerfinance.gov/ask-cfpb/will-my-children-be-able-to-keep-my-home-after-i-die-if-i-have-a-reverse-mortgage-loan-en-242/) — Heirs can settle a HECM larger than the home’s value by selling for at least this share of the appraised value (Aug 28, 2026)
- [CFPB: What is a reverse mortgage?](https://www.consumerfinance.gov/ask-cfpb/what-is-a-reverse-mortgage-en-224/)
- [HUD: FHA reverse mortgage for seniors (HECM)](https://www.hud.gov/hud-partners/single-family-hecmhome)

_General information, not financial advice._