1,401,176 HECM reverse mortgages insured by FHA since 1989.
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Reverse mortgage question
Yes. On an adjustable-rate HECM, the unused part of your line of credit grows over time, at the same rate as the loan balance, which is the note rate plus annual FHA mortgage insurance. Only the unused part grows, so if you draw every dollar, there's nothing left to grow. The lender can't freeze or reduce a HECM line of credit as long as you meet the loan terms. Fixed-rate HECMs have no line of credit, and proprietary programs set their own rules.
Yes, it does. This is one of the most misunderstood, and most useful, features of a reverse mortgage.
On an adjustable-rate HECM, your available line of credit grows each month. It grows at the same rate as your loan balance: the interest rate on your loan plus the annual FHA mortgage insurance.
Only the part you haven't used grows. So if you set up a line of credit and leave most of it alone, it gets bigger every month. If you draw every dollar on day one, there's nothing left to grow.
I want to be careful with the words here, because I've seen this one misused for years. Your unused line doesn't "earn interest." It's not a savings account, and it's not cash sitting in a bank. What grows is your borrowing power: the amount you're allowed to draw later.
That's still a big deal. Money you don't touch today turns into more money you can reach later, when you might need it more.
Because the growth rate follows your loan's rate, the line grows faster when rates go up. Your balance grows faster too, but only on money you've actually borrowed. If you're mostly leaving the line alone, rising rates work in your favor.
This is where a HECM line of credit and a bank HELOC part ways. A bank can freeze or reduce a HELOC in some situations, which many homeowners learned in 2008. A HECM line of credit can't be frozen, reduced, or canceled by the lender as long as you meet the loan terms. Read HECM vs. HELOC.
Meeting the loan terms means living in the home as your primary residence. There are no required monthly mortgage payments. You must continue to pay property taxes and homeowners insurance, maintain the home, and meet the other loan terms.
On an adjustable HECM, if you pay down your balance, the money you pay generally goes back into your available line of credit, and it keeps growing. See Can reverse mortgages be paid off at any time?
Some people open a HECM line of credit early and leave it mostly untouched, as a safety net for emergencies, a down market, or care at home later. Financial planning research has looked at this closely. Read the standby line of credit strategy and Paying for In-Home Care With a Reverse Mortgage.
Want to see what your line of credit could look like, today and in 10 years? Get your estimate, check today's rates, or call us at 530-888-6000.
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).
