What is Reverse Mortgage?
Background
A reverse mortgage lets senior citizens unlock the value of their self-occupied home without selling it. The bank pays them a regular amount against the property, and the loan is settled later from the property’s value.
Explanation
Eligible seniors pledge their house to a lender, which then pays a monthly, quarterly or lump-sum amount for a set term. Interest accrues on these payouts, increasing the loan balance. After the borrower’s death or term end, heirs can repay and keep the house or the lender may sell it to recover dues, with any surplus going to the heirs.
Example
A 70-year-old living in a ₹1 crore home but with limited liquid savings might use reverse mortgage to receive ₹25,000–₹30,000 per month, reducing pressure to sell the house or depend on children.
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