Overview

• Opting for tenure payments or a credit line rather than a lump sum helps preserve home equity by pacing withdrawals.
• Compounded interest accrues on outstanding balances and can outstrip home appreciation in stagnant markets, accelerating equity depletion.
• Non-recourse provisions limit borrower liability to home sale proceeds, but lenders can foreclose if property taxes, insurance, or upkeep obligations are not met.
• Advisers in both the United States and Australia recommend running long-term cash-flow models to gauge how reverse mortgage scenarios affect retirement security.
• Selling and downsizing can free up cash without new debt, while Australian retirees might use downsizer super contributions or reverse mortgages for purchase to fund living expenses.