1,401,176 HECM reverse mortgages insured by FHA since 1989.
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Reverse mortgage guide
A fixed-rate HECM gives you one rate for life, but you take all your money as a single lump sum at closing, and interest starts on the whole amount right away. An adjustable-rate HECM gives you choices: a line of credit, monthly payments, a lump sum, or a mix, and you only pay interest on what you draw. The unused part of an adjustable line of credit grows over time. Fixed tends to fit people who need most of the money now, like paying off a large mortgage or buying a home. Adjustable tends to fit almost everyone else.
Fixed or adjustable. It's one of the first decisions you'll make on a reverse mortgage, and it matters more than most people expect.
On a regular mortgage, fixed versus adjustable is mostly about whether your payment might change. On a reverse mortgage, there's no required monthly mortgage payment at all. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms. So the choice is really about something else: how you get your money, and what happens to the money you don't take.
A fixed-rate HECM has one interest rate for the life of the loan. It never changes. That's the appeal.
The tradeoff is how the money comes out. A fixed-rate HECM is a single draw at closing. You take your money all at once, and interest and mortgage insurance start on the whole amount right away.
There's no line of credit and no monthly payouts to you. You can't come back later and draw more.
HUD limits how much of your principal limit you can take in the first year. Generally, it's 60 percent, or more if you need it to pay off your mortgage and other required costs at closing.
On an adjustable loan, the rest becomes available after the first year. On a fixed-rate loan, since the whole thing is one draw at closing, money above the first-year limit generally isn't available later. So a fixed-rate HECM can leave money on the table.
Learn more on Fixed-Rate Reverse Mortgages.
An adjustable-rate HECM gives you the most choices. You can take your money as:
You can generally change your plan later for a small fee.
This is one of the nicest features of an adjustable HECM. If you take a small amount at closing and leave the rest in a line of credit, you're only building interest on what you took, plus any financed closing costs. The money sitting in the line of credit doesn't cost you anything until you use it.
The unused part of an adjustable HECM line of credit grows over time, at the same rate as your loan balance: the note rate plus annual mortgage insurance. The longer you leave it alone, the more you can draw later.
That's why some people open a reverse mortgage early and barely touch it. It sits there as a safety net. Read the standby line of credit strategy.
And unlike many bank HELOCs, a HECM line of credit can't be frozen, reduced, or closed by the lender as long as you meet the loan terms. See HECM vs. HELOC.
An adjustable HECM rate is an index plus a margin.
When you compare adjustable quotes, the margin is the number to watch. The index is the same for everyone using it.
A quarter-point difference in margin doesn't sound like much. But over many years, it makes your balance grow faster, which uses up equity faster.
Here's the sneaky part. Sometimes two quotes with different margins show the same amount of money available. That can happen when market rates are low enough that HUD's minimum expected rate kicks in. People see the same bottom line and miss the rate difference. Always compare the margin, not just the money available.
Caps matter less on a reverse mortgage than on a regular one, because a higher rate doesn't create a payment. But they affect how fast your balance can grow. I'll show you the caps on any adjustable loan before you choose. See Today's Reverse Mortgage Rates.
On a HECM, the rate doesn't just set how fast the balance grows. It also helps set how much money you can access, called the principal limit.
HUD uses an expected rate in that math:
A higher expected rate means less money available. A lower one means more. So the rate you pick, fixed or adjustable, changes your bottom line.
Here's the whole comparison in one place.
| Feature | Fixed-rate HECM | Adjustable-rate HECM |
|---|---|---|
| Interest rate | Never changes | A Treasury index plus the lender's margin, adjusting within caps |
| How you get your money | One lump sum at closing | Line of credit, monthly payouts, a lump sum, or a mix |
| Line of credit | None | Yes, and the unused part grows |
| Interest charged on | The full amount, from closing | Only the money you draw |
| Money above the first-year limit | Generally not available later | Becomes available after the first year |
| Change how you get paid later | No | Yes, for a fee capped by HUD at $20 |
| APR shown | Yes | No fixed APR, because the rate can change |
| Usually best for | Paying off a large mortgage, buying a home, or needing all the money now | Flexibility, monthly income, or a standby line of credit |
Here's one I've used for years.
A 75-year-old borrower owes $20,000 on a home worth $250,000. She wants to pay off her mortgage and get $500 a month for the rest of her life. She has no other need for money right now. Fixed or adjustable?
Adjustable. With a fixed rate, she'd have to take one lump sum at closing, and there's no way to set up monthly payouts. With an adjustable rate, she can pay off the $20,000 and set up monthly payments for as long as she lives in the home. Whether she gets the full $500 a month and still has money left over in a line of credit that grows depends on rates at the time and her loan estimate.
Plenty of people still choose fixed, because they're nervous about adjustable rates and want the certainty. That's a fair choice. Just make it with your eyes open.
Proprietary (jumbo) reverse mortgages follow their own rules. Many are fixed-rate lump sums, and some offer an adjustable line of credit. They don't all have a growing line of credit like the HECM. If your home is worth more than the HECM limit, I'll compare both.
It depends on how you'll use the money. If you need most of it now, fixed can make sense. If you want flexibility, a line of credit, or monthly payments, adjustable usually wins.
Not on a HECM. A fixed-rate HECM is a single lump sum at closing.
It can rise, but only within the caps written in your loan documents. There's still no required monthly mortgage payment, and you must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
Not on the same loan. You'd have to refinance into a new HECM, with new closing costs. See Reverse Mortgage Refinance.
On an adjustable HECM, yes. The unused part grows at the same rate as your balance. See Does my line of credit grow?
Generally, yes. Voluntary payments on an adjustable HECM line of credit restore what you can draw.
Most of the people I work with end up choosing adjustable once they see how the options compare.
The loan officer you choose should show you several side-by-side comparisons, not steer you to the one they want to sell. That's how I work. Get My Estimate, see today's rates, or call us at 530-888-6000, and I'll run both for you.
ZYNG Mortgage, Inc., NMLS #76801. A reverse mortgage has no required monthly mortgage payments and uses your home's equity. Fees, mortgage insurance and other costs can be added to the loan balance, and the balance grows over time as interest is added, so your equity typically decreases. When the loan becomes due, the home may need to be sold, or the loan repaid from other funds. Interest is not tax-deductible until it is paid, in part or in full. You keep title to your home and must keep paying property taxes, homeowners insurance and upkeep, and meet the other loan terms; not doing so can make the loan due and could lead to foreclosure.
This material is not from HUD or FHA and was not approved by HUD or a government agency.
HECM count at the top of this page: HUD data through September 2026 (source, opens in a new tab).
