Reverse Mortgage: Home can serve a Steady Flow of Income in Old Age

We all are worried how our lives would be after we age 60 or more. At that age, you do not really have any assurance how you will be able to repay the loan amount. In such cases, there is a benefit that your old house can provide you. The term is ‘reverse mortgage’ which means that you can apply for a loan against your house and the loan cannot exceed the present value of your house. You may use a reverse mortgage calculator in order to calculate the monthly amount that you can avail by reverse mortgaging your house.

After you apply for a reverse mortgage, you will be getting monthly amount with no obligation to repay the loan until the applicant dies, or the house is sold. There should be no existing liens on the house before you apply for the loan.

The concept of reverse mortgage is slowly being popularized in India as well. It is a really viable option of a steady flow of income when you reach your old age and pension does not seem enough for you.

When you are a senior citizen, you might need a monthly payout or a lump sum or a combination of both in case any of the following situations arise:

  • Medical emergencies,
  • Family expenditures,
  • As an alternate to pension or other incomes
  • In case you need to repay any existing loan on any other residential property,
  • When you need to upgrade, renovate or extend your existing residential property or house,
  • And there are many other genuine borrower needs that sometimes need to be fulfilled urgently.

reverse mortgage


  • The property on which you are willing to have a reverse mortgage should be the one which you use as your primary property of residence.
  • The property of residence on which you are applying for the reverse mortgage should be self-occupied and self-acquired at the time of application.
  • In case you intend to cease to use the respective property as your primary place of residence, it is your obligation to inform your bank about the same as soon as possible.


The Equitable Mortgage (E.M.) value of the respective property on which the reverse mortgage has been applied for, which is under the name of the borrower or borrowers or the borrower’s family members act as your security on your loan. In case you have co-owners of the respective property, they are also supposed to act as the co-borrowers of the reverse mortgage.


Before you apply for a reverse mortgage on your residential property, your property needs mandatorily to be insured so as to have an absolute value of the property.

Tenure and Interest rates:

The tenure of loan and the interest rates vary as per your respective bank. Generally the tenure is somewhere between 10 years minimum to 20 years at the max, and a load of minimum 1 lakh to an upper limit of 100 lakhs can be applied for, depending on the value of your respective property.

So, in your old age if you need an additional source of borrowed income, reverse mortgage can be one of the very viable options.

NOTE: Please check all the terms and conditions of your respective bank and all the legal and other formalities that vary from bank to bank carefully before you apply for the loan. All the attributes mentioned above are subject to variations depending upon your bank.

Vijayraj Reddy
Vijayraj Reddy is founder & editor-in-chief of, a financial blog which helps people to earn money, invest money and save money. You can find him on Facebook & Twitter or send him email at [email protected]

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