What is a Reverse Mortgage?
A reverse mortgage (60+ Equity Release) allows homeowners aged 60 and above to convert their home equity into cash without selling or making monthly payments. The loan accumulates with compound interest and is repaid from the property sale after death or when the owner moves out.
Israeli Consumer Protection: By law, you cannot owe more than the property's value. Even if interest accumulates beyond the home's worth, your other assets and your heirs are protected.
Pros vs Cons: The Full Picture
Advantages
- ✓No monthly payments required
- ✓Stay in your home for life
- ✓Access up to 50% of property value
- ✓Legal protection - can't owe more than home value
- ✓Use funds for any purpose
Disadvantages
- ✗Compound interest erodes inheritance
- ✗Higher interest rates than standard mortgages
- ✗High setup fees (2-4%)
- ✗Nursing home move may trigger repayment
- ✗Property maintenance remains your duty
The Compound Interest Reality Check
Example: ₪500,000 Reverse Mortgage at 6% Interest
The math: At 6% annual compound interest, your ₪500,000 loan nearly doubles in 12 years. If your home is worth ₪2M today and grows 3% annually to ₪2.7M in 10 years, but the debt is ₪895K, your heirs inherit ₪1.8M instead of ₪2.7M - a ₪900K difference.
Frequently Asked Questions
Frequently Asked Questions
A reverse mortgage (also called 60+ Equity Release) allows homeowners aged 60+ to access the equity in their home without selling it. Instead of making monthly payments, the loan (plus compound interest) accumulates and is repaid when the homeowner passes away, sells, or moves out. The bank essentially 'buys' a portion of your home's future value.
Is Reverse Mortgage Right for You?
Before committing to a reverse mortgage, get a free analysis of all your options. We often find better alternatives.
Legal Disclaimer
The information and simulations presented on this website are for illustrative purposes only and do not constitute a binding offer for credit or financial advice. Credit Approval: Subject to final underwriting, clean credit data (positive credit score), clean banking history, and meeting the threshold requirements of the financing institutions. Interest Rates: The interest rates displayed are estimates only, based on average market data, and may change at any time according to the client's individual risk profile and economic conditions (Bank of Israel interest rate changes / CPI). No Commitment: RealFix does not guarantee loan approval or the terms displayed in the calculator. E&OE.