Reverse Mortgage vs. Home Equity Loan vs. HELOC
Published July 5, 2026 · Reviewed by Calvin
Quick comparison
| Feature | Reverse mortgage (HECM) | Home equity loan | HELOC |
|---|
| Minimum age | 62+ | None | None |
| Monthly payments | None required | Yes | Yes (draw period) |
| Credit/income test | Financial assessment | Full underwriting | Full underwriting |
| FHA insurance | Yes (HECM) | No | No |
| Line grows over time | Yes (credit line option) | No | Draw period only |
When a HELOC or home equity loan may be better
- You are under 62
- You can comfortably afford monthly payments
- You need a short-term bridge, not lifetime housing cash flow
- You want to preserve maximum equity for heirs
When a reverse mortgage may fit
- Fixed retirement income cannot support new monthly payments
- You plan to stay in the home long-term
- You want a growing line of credit as a backup reserve
When this is NOT a good fit
- You cannot reliably pay property taxes, homeowners insurance, and maintenance
- You plan to move within a few years
- You need every dollar of home equity preserved for heirs
- Medicaid or SSI eligibility depends on keeping assets below program limits (consult an elder law attorney)
- You were pressured by a salesperson without time to research alternatives