Reverse mortgage – a chance for older borrowers – Type of Loans

One of the most popular types of loan is a mortgage. However, not everyone can afford it, e.g. the elderly. Banks are reluctant to grant loans to elderly people because there is a higher than normal risk of default. A reverse mortgage loan was launched especially for them.

What is the reverse mortgage loan?


A standard mortgage is very simply based on receiving money in exchange for the right to real estate. The reverse is true for the same mortgage. The difference is that in an inverted loan it is repaid only after the borrower’s death and in an ordinary mortgage – it is repaid regularly from the date of the contract for a specified period of time.

And here it is very easy to see why in the first case the product is directed to the elderly and in the second – to the younger. An inverted mortgage is turning to the needs of older people and creating opportunities for them to obtain financial support when they need it most.

In this way they can receive a loan once or monthly in installments. The second option is a very good way to increase your own pension.

How do you get a reverse mortgage?

How do you get a reverse mortgage?

A reverse mortgage can be used regardless of your creditworthiness. The only collateral for the loan is simply the property. The bank measures the flat and specifies the amount to be referred to. Then the duration of the contract and the amount of installments are determined.

The borrower has the option of withdrawing from the contract, but must then repay the money already paid with interest. If he does not do so, after his death the apartment becomes the property of the bank and heirs can buy it by paying off the entire loan with interest.



Following the implementation of the reverse mortgage law, various online surveys were created that investigated potential customers’ interest in this product. Unfortunately, it resulted from them that the majority of recipients were not interested in it. Why? First of all, it is a new product and its purpose is not always understood. Older people are simply afraid of it because they mistakenly conclude that they can be thrown out at any time. However, surveys may not have covered all potential customers because people in the age group do not often use the Internet.

People are afraid of new and incomprehensible products, so they assume in advance that they will not use them. This, on the other hand, causes banks to fear that they will not have interest in a given product and give up advertising. In turn, an unadvertised product cannot arouse interest and trust, so the circle closes. The victims in this matter are the elderly who are still unable to provide financial support.

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