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Changing Attitudes, Changing Motives: The MetLife Study of How Aging H... Skip to content

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Changing Attitudes, Changing Motives: The MetLife Study of How Aging Homeowners Use Reverse Mortgages – 2011


A large percentage of Americans 50 to 64 worry that the recession has made it harder for them to meet financial needs in retirement. As the Baby Boomer generation grows older, there is an increasing trend to include home equity as a natural part of retirement planning. Due to this trend, MetLife (who sells reverse mortgages) conducted this study to better understand how older adults are using reverse mortgages, which allow borrowers age 62+ to defer making principal and interest payment on their existing home mortgage until they sell the home, and instead collect payments monthly, or in a lump sum, based on their equity. The U.S. government has stipulations on who qualifies for reverse mortgages.

MetLife’s study is designed to bring more understanding to the mindset of borrowers when it comes to reverse mortgages, which are not very widely used, and are viewed in the financial services sector as a “last resort” for many consumers.

Key Points

MetLife analyzed responses to questions that the U.S. Department of Housing and Urban Development (HUD) asked reverse mortgage applicants. MetLife concluded that older homeowners are looking for solutions to help with their financial difficulties, and that reverse mortgages can play an essential role in helping them do that. Sixty-seven percent of the homeowners questioned wanted to lower household debt.

Other key findings include:

  1. If a small proportion of the Boomer population takes out reverse mortgage loans, it will have a significant impact on the reverse mortgage market.
  2. The average age of current borrowers is 73, but more reverse mortgage borrowers are applying at earlier ages, with one in five of those considering a reverse mortgage being between 62 and 64 years of age.
  3. The main reasons that older homeowners are considering reverse mortgages are to pay off debt, increase income, enhance quality of life, and plan ahead for emergencies.
  4. Sixty-seven percent of the respondents have a conventional mortgage that will need to be repaid if they decide to take out a reverse mortgage, and 27 percent noted having more than just housing debt.

How to Use

For community leaders and planners, it is important to educate older homeowners on the appropriate uses of their home equity “nest egg.” Acceptance of reverse mortgages is expected to grow as more and more Boomers tap into their home equity to fund their retirement years. Community leaders should make sure information is available from unbiased sources on the benefits and risks associated with reverse mortgages.  

View full report: Changing Attitudes, Changing Motives: The MetLife Study of How Aging Homeowners Use Reverse Mortgages – 2011 (PDF – 295 KB)

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