Learning Center
Reverse Mortgage vs. HELOC
Two ways to tap equity that behave very differently in retirement.
4 min read
A HELOC is a home equity line of credit that requires monthly payments and is typically underwritten on income and credit. Lenders can reduce or freeze a HELOC, and the draw period eventually ends.
A reverse mortgage line of credit requires no monthly mortgage payment, cannot be frozen or reduced as long as the loan remains in good standing, and its unused portion generally grows over time.
A HELOC can be a strong fit for a short-term need with a clear repayment plan and reliable income. A reverse mortgage is more often used as a long-term retirement cash-flow strategy.
Neither is universally better. The correct choice depends on age, income, how long you plan to stay in the home, and what you want the money to do.
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