At 70 and Single, One Homeowner Weighs a Reverse Mortgage Against a Home-Equity Agreement

For millions of older Americans, the family home represents the single largest store of wealth they possess — and increasingly, it is the asset they are being forced to consider liquidating, at least partially, to fund retirement. One such homeowner, a 70-year-old single individual who reported to MarketWatch a frank and sobering assessment of their own longevity — “I don’t think I’ll make it to 80” — is now weighing two of the most consequential equity-release instruments available to older homeowners: a reverse mortgage and a home-equity agreement.

The question is not merely a personal one. With U.S. home equity among those aged 65 and older estimated to exceed $9 trillion in aggregate, according to Federal Reserve data, the mechanics of how retirees choose to access that wealth carries significant implications for household financial security, estate planning, and the broader retirement economy. Advisers say the choice between these two instruments turns on several factors, including life expectancy, cash-flow needs, desire to preserve estate value, and tolerance for complexity.

An older person sitting at a kitchen table reviewing financial documents beside a window overlooking a residential neighborhood.

Reverse Mortgages: Income Now, Obligations Later

A Home Equity Conversion Mortgage, or HECM — the federally insured reverse mortgage product backed by the Department of Housing and Urban Development — allows homeowners aged 62 or older to borrow against their home’s value without making monthly principal or interest payments. The loan balance, which accrues interest over time, is not repaid until the borrower sells, moves out permanently, or dies. For a 70-year-old borrower with a home valued at, say, $400,000 and a modest remaining conventional mortgage balance, the available HECM proceeds could range between $150,000 and $220,000 depending on current interest rates and HUD’s principal limit factors.

The appeal of that structure is obvious for someone who anticipates a shorter retirement horizon. If the homeowner does not survive to 80, the loan balance — though it compounds — is unlikely to erode the estate entirely. However, financial planners caution that reverse mortgage interest rates, often running between 6.5% and 8% annually on adjustable-rate products, mean the outstanding balance can grow substantially within a decade if left untouched as a line of credit. Origination fees, mortgage insurance premiums, and servicing costs add further drag. Borrowers must also continue paying property taxes, homeowner’s insurance, and maintenance costs or risk default and foreclosure.

Home-Equity Agreements: A Costlier but Simpler Alternative

A home-equity agreement, sometimes called a home equity investment or shared appreciation agreement, operates on an entirely different model. Rather than issuing a loan, a private investor — typically a fintech-backed firm such as Hometap, Point, or Unison — provides the homeowner a lump sum in exchange for a share of the home’s future appreciated value. There are no monthly payments and no accruing interest rate, but the investor’s eventual share of appreciation can be substantial. Depending on the provider, the investor may claim between 15% and 40% of the home’s future value at the time of settlement, which must typically occur within 10 to 30 years.

A suburban two-story house with a well-maintained front lawn on a quiet street in autumn.

For a homeowner who believes they will not live long enough to see a decade of compounding reverse mortgage interest, a home-equity agreement might appear attractive in its simplicity. Yet advisers point out a critical asymmetry: if the home appreciates significantly — say, 30% over eight years in a strong local market — the investor’s contractual share could cost the estate far more in dollar terms than a reverse mortgage’s accrued interest would have. In markets where home prices are still rising at an annualized rate of 4% to 6%, that risk is not trivial. Additionally, home-equity agreements lack the federal consumer protections embedded in the HECM program, making due diligence on contract terms especially important.

Choosing the Right Path at 70

Financial planners who specialize in retirement income generally advise clients in this demographic to stress-test both scenarios against a range of outcomes: modest home appreciation, rapid appreciation, and flat or declining values. They also recommend accounting for Medicaid eligibility thresholds, since accessing home equity can affect long-term care planning. For a single individual with no spouse or co-borrower, the absence of a surviving partner’s right to remain in the home — a common HECM protection — is moot, simplifying one layer of the decision.

The broader lesson embedded in this individual’s dilemma is one that retirement economists have long underscored: home equity is a critical but frequently overlooked component of retirement planning. Too many households treat the family home as an untouchable legacy asset rather than a financial instrument. At a time when Social Security’s long-term solvency remains under legislative debate and traditional pension coverage continues to decline, the conversation this 70-year-old is having — difficult and uncomfortable as it is — may become a defining financial discussion of an entire generation.