Reverse Mortgage vs Home Equity Agreement at 62

Updated August 14, 2026. Quick answer: at 62 you are eligible for both, and they are priced by opposite things. A reverse mortgage’s cost is a formula in federal regulation and does not move with your home’s value at all. A home equity agreement’s cost is nothing but your home’s value. So there is one appreciation rate at which they cost the same, and on the numbers below it is 7.52% a year over ten years. Below that rate the agreement is cheaper; above it the reverse mortgage is.

There is a rate at which they cost the same

A $400,000 home, $100,000 of cash today, a 6.00% note rate. The reverse-mortgage side is built only from the regulation: the balance opens at the cash plus the up-front mortgage insurance of 2.00% of the maximum claim amount ($8,000 here), then grows every month at one-twelfth of the note rate plus one-twelfth of the 0.50% annual insurance rate — an effective 6.697% a year. The agreement side is the cheapest honest version of one: a share of the home’s whole value equal to the cash as a percentage of it, with no starting-value discount and no multiplier.

The tie rate falls as the term lengthens — 8.35% at five years down to 7.11% at twenty — because the up-front insurance premium is a fixed toll spread over more years. It never falls below the loan’s own compounding rate of 6.697%, which is the floor the whole comparison sits on.

Held at ten years and moved across rates, the same arithmetic decides it:

This is the opposite of how the two are usually sold. The agreement is presented as the one with no interest, and it is — but a share of a fast appreciating house is an expensive way to have borrowed nothing. The reverse mortgage is presented as the expensive one, and it is, at a rate that is fixed and that a strong housing market does nothing to increase.

What federal regulation guarantees on one side

The reverse mortgage in this comparison is a HECM, and the things that decide it are in the regulation rather than in a brochure. The age floor is hard: “The youngest borrower shall be 62 years of age or older at the time of loan closing.” — 24 CFR § 206.33.

Counselling is compulsory, and it is compulsory in a way that leaves a document behind:

“The borrower, any Eligible or Ineligible Non-Borrowing Spouse, and any non-borrowing owner must receive counseling.” — 24 CFR § 206.41(a)

“The HECM counselor will provide the borrower with a certificate stating that the borrower, Non-Borrowing Spouse, and non-borrowing owner, as applicable, has received counseling. The borrower shall provide the mortgagee with a physical copy of the certificate.” — 24 CFR § 206.41(c)

Then the protection that does the most work:

“The borrower shall have no personal liability for payment of the outstanding loan balance. The mortgagee shall enforce the debt only through sale of the property. The mortgagee shall not be permitted to obtain a deficiency judgment against the borrower if the mortgage is foreclosed.” — 24 CFR § 206.27(b)(8)

And the cost mechanics, which is why the balance grows without a bill ever arriving: “The interest charged on the outstanding loan balance shall begin to accrue from the funding date and shall be added to the outstanding loan balance monthly as provided in the mortgage. Under all payment options, repayment of the outstanding loan balance is deferred until the mortgage becomes due and payable under § 206.27(c).” — 24 CFR § 206.19(g); and “The payment of monthly MIP may be added to the outstanding principal balance.” — 24 CFR § 206.27(b)(7). The rates themselves are not in the regulation, which states only a ceiling. They are set by mortgagee letter: “The initial MIP rate is changed to two percent (2.00%) of the Maximum Claim Amount (MCA). … The annual MIP rate is changed to one-half of one percent (0.50%) of the outstanding mortgage balance.” — HUD Mortgagee Letter 2017-12 (Aug. 29, 2017). Every figure on this page uses those two numbers.

What the agreement guarantees, and who says so

There is no counselling requirement, no age floor and no federally set rate on the other side, and the reason is one definition:

“Credit means the right to defer payment of debt or to incur debt and defer its payment.” — 12 CFR § 1026.2(a)(14)

Regulation Z — the rulebook behind a disclosed APR and a three-day right to cancel — attaches to credit. An agreement drafted not to create debt sits outside it. What that means alongside a HELOC and a home equity loan is worked through on the three-way comparison; what matters here is the contrast with the reverse mortgage, where the counselling, the certificate and the non-recourse rule are federal requirements rather than contract terms.

Two states have legislated anyway, and both were read at primary. Connecticut defines the product and puts it inside the definition of a residential mortgage loan:

““Shared appreciation agreement” means a nonrecourse obligation in which an advance sum of monetary value is extended to a consumer, as a lump sum or otherwise, in exchange for an equity interest in a dwelling, residential real estate or a future obligation to repay a sum upon the occurrence of an event, including, but not limited to, the transfer of ownership, repayment maturity date, death of the consumer” — Conn. Gen. Stat. § 36a-485(30)

Note what that concedes. Connecticut calls it nonrecourse and still calls it a mortgage loan — ““Residential mortgage loan” means any loan, including a shared appreciation agreement, primarily for personal, family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling” (Conn. Gen. Stat. § 36a-485(27)) — so being nonrecourse was never what made it not a loan. Washington went at it through disclosure, and its rule requires exactly the parameters the industry does not volunteer:

“Within three business days following receipt of a loan application for a shared appreciation mortgage, or a mortgage with a shared appreciation provision, in addition to the disclosures required by federal law or by this chapter, you must provide each borrower with a written disclosure containing at a minimum the following: (a) The percentage of shared equity or shared appreciation you will receive (or a formula for determining it); (b) The value the borrower will receive for sharing his or her equity or appreciation; (c) The conditions that will trigger the borrower’s duty to pay; (d) The conditions that may cause the lender to terminate the mortgage or shared appreciation provision early;” — WAC 208-620-510(6)

Outside those two states, neither the counselling nor the disclosure exists. The absence of any other state from this page means it was not read, never that it has no rule.

The obligations are not symmetric

Non-recourse appears on both sides and does not mean the same thing. On the reverse mortgage it is a federal regulation and the lender may not pursue you for a shortfall. On the agreement it is a contract term — Connecticut’s statute uses the word, but the protection is whatever the document you sign says it is, and one provider’s own FAQ states that the exit that keeps your home carries no downside sharing at all.

The ongoing duties run the other way. The agreement has no monthly payment and no federal occupancy rule. The reverse mortgage has both a duty and a consequence:

“Payment of the following property charges are obligations of the borrower and shall be made through the LESA, by the borrower, or by the mortgagee, in accordance with paragraphs (b) through (e) of this section on or before the due date: property taxes, including any special assessments levied by local or State law, hazard insurance premiums, and applicable flood insurance premiums.” — 24 CFR § 206.205(a)(2)

“(2) The mortgage shall state that the outstanding loan balance shall be due and payable in full, upon approval of the Commissioner, if any of the following occur: (i) The property ceases to be the principal residence of a borrower for reasons other than death and the property is not the principal residence of at least one other borrower; (ii) For a period of longer than 12 consecutive months, a borrower fails to occupy the property because of physical or mental illness and the property is not the principal residence of at least one other borrower; (iii) The borrower does not provide for the payment of property charges in accordance with § 206.205; or (iv) An obligation of the borrower under the mortgage is not performed.” — 24 CFR § 206.27(c)(2)

That pairing is the single most under-explained thing about a reverse mortgage. It is not that you can lose the house for missing a payment — there is no payment. It is that the taxes, the insurance and living there are conditions, and failing them makes the whole balance due.

The verdict, by who you actually are

• You expect the house to appreciate quickly. The reverse mortgage is the cheaper instrument, and it is not close above 7.52% a year. The agreement takes a share of a number you expect to be large.
• You expect the house to go sideways. The agreement is the cheaper instrument, because its cost is a share of a gain that is not happening while the loan balance compounds regardless. Read the starting-value discount first: with one, a flat market is a loss rather than a break-even.
• You want the outcome to be knowable. The reverse mortgage. Its cost is a formula you can run today, and this site publishes the growth arithmetic and what heirs face.
• You are not 62. Only one of these is available, which is the real reason many people end up with an agreement.
• You would fail the taxes-and-insurance condition. The reverse mortgage becomes due if you do; the agreement has no such federal trigger. This is the case where the smaller protections matter more than the price.

What we could not establish, and are not going to invent

• No closing costs are modelled on either side. Origination, title and servicing on the reverse mortgage, and the 3-4.9% origination fees the agreement providers publish, are all real and none is in the tables. Both sides are understated; the reverse mortgage is understated more.
• The principal limit is not modelled. How much a 62-year-old may actually draw is set by HUD factors this build did not read, so the tables assume the cash requested is available. At 62 it is the age at which the least is available.
• No CY2026 maximum claim amount is asserted. HUD’s limits system was not reachable from this environment; the comparison uses the appraised value, which is correct below the national limit and wrong above it.
• The agreement is modelled on its cheapest shape. No starting-value discount and no multiplier. Real offers carry both, and every one of them moves the tie rate against the agreement. The true-cost page prices those.
• Provider terms are not federal rules and may change without notice. They were read on August 14, 2026 and are quoted with the date.
• Nothing here is a recommendation of either product. It is an arithmetic comparison of two documented cost structures.

Sources

Every figure on this page is computed from the text quoted below. Each row links the document it was read from.

General consumer information, not financial, tax or legal advice. Rules and provider terms are as published by the cited source on 2026-08-14 and change without notice; your own circumstances govern.