Do Rising Interest Rates Impact a Reverse Mortgage?

It was the last call I took last night and the first call I took this morning.

Basically, both homeowners asked the same question: “Will a rate hike impact how much I can get with a reverse mortgage?”

In a word? Yes.

And here’s why: the percentage of home equity you qualify for with a reverse mortgage is determined by the youngest title-holder’s age and the prevailing interest rate. If rates go up, the percentage of available equity goes down.

We have been in a stable rate environment since 2006, characterized by miniscule rate fluctuations. But following Friday’s strong jobs report, the Federal Reserve has indicated a December rate hike is a “live possibility.”

The near-certain rate hike is not a reason to panic. But it is something to note, and it’s important to know that it will, indeed, be reflected in funds available through a reverse mortgage.

A reverse mortgage is not a fit for everyone. But as I’ve said many times, no one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you are – or someone you know is – thinking about a reverse mortgage, now is a really good time.

If you’d like more information on how a reverse mortgage may help achieve your retirement goals, give me a call. I always love hearing from you.


Laurie MacNaughton [NMLS# 506562] is a freelance writer and a Reverse Mortgage Consultant at Southern Trust Mortgage. She can be reached at: 703-477-1183, or

Visit Laurie MacNaughton on YouTube

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