WHAT DOES IT OFFER ME?

FAQs

What is a Reverse Mortgage?

A Reverse Mortgage is a mortgage loan that enables over-65s to receive, using their home as security, monthly payments to top up their income for a fixed term, and potentially for the rest of their life.

After the death of all of the holders, their heirs will have a certain period of time to repay the total amount owed, with the option of repaying it by selling the property or of keeping the house and repaying the debt.

How does it work?

While with a traditional mortgage you, as a customer, receive the full amount of the loan from the bank and make monthly payments to repay the debt, with a Reverse Mortgage, in exchange for mortgaging your home, you will receive a monthly payment that you will not need to pay back in your lifetime. After death your heirs will have to repay the loan and its interest.

The monthly amounts received through a Reverse Mortgage for a fixed term are not subject to personal income tax.

In addition, this monthly income can supplement any other income that you may be receiving such as a pension or other funds; and the loan can be paid back early if you wish.

Who can apply for a Reverse Mortgage?

  • People over 65.
  • They must be the homeowners.
  • No other mortgages on the property.

What are the requirements?

  • The property must be their main residence.
  • The value of the property must be above certain thresholds.

What are the main advantages?

TAX ADVANTAGES

The amounts received through a reverse mortgage are not subject to personal income tax.

YOU KEEP YOUR HOME

You will be able to continue living in your current home as the owner.

VALUE FOR YOUR HEIRS

The heirs will get the remaining value of the house after the debt has been paid off.


We know that the decision to take out a Reverse Mortgage is very important and that you need time to understand all the details and decide whether or not to take it out. As well as having a team of specialists at your disposal, it is very important for your family to help you with your decision-making process.

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Most common questions from customers about the reverse mortgage

  • How much money can I receive for a Reverse Mortgage?

  • The money you will receive will depend mainly on your age and the value of your home: the higher both figures, the more you can receive.
  • Can I apply for a Reverse Mortgage on a second home or premises?

  • No, you can only apply if it is your habitual residence.
  • Will I still own my home?

  • With a Reverse Mortgage, your home is only used as security, but at no stage do you lose ownership. The costs for maintaining your property will be your responsibility without any change of ownership, just like with any other mortgage loan.
  • How is the income received from a Reverse Mortgage taxed?

  • The amounts obtained through a Reverse Mortgage (up to life expectancy) are not subject to personal income tax as they originate from a loan or credit. 
  • Will the monthly income that I will receive be updated as a result of the CPI?

  • No. The monthly amounts received through Reverse Mortgage will remain the same until the end of the mortgage. Otherwise, the CPI would have a direct impact on the final debt that the heirs would have to pay upon death of the owners, and could cause the debt to increase significantly.
  • Could the debt incurred with a reverse mortgage end up exceeding the value of the property?

  • It is very rare and highly unlikely that this situation will arise, since the product is designed with enough of a margin for your heirs to comfortably pay off the debt. Even if this does happen, the debt will always be limited to the assets of the estate itself, the recovery of the debt is limited to the assets comprising the inheritance itself.

  • Who can give me independent advice?

  • We have a series of approved companies to carry out the independent advisory service. You can choose the one that best suits your needs from among these companies. If you want to use a third party, you can put them in contact with us so they can be approved.
  • Can I repay the mortgage early?

  • Yes, it can be repaid early at any time. If this happens, a fee of 0.5% will be charged if the repayment occurs within the first five years in the life of the loan, or of 0.25% if the repayment occurs within or after the sixth year in the life of the loan. The fee is only applied to the amount repaid.
  • After signing, do I have to provide any other documents?

  • Documents will be reviewed annually with the borrowers and we will request the following documents: 

    • Certificate of life: life certificate checked at least once per year: this document declares that a person is alive and states their marital status as at the date of issue. This document can be obtained from the applicable local registry office.
    • Home insurance: proof of payment of fire insurance, insurance for other property damage or home insurance.
    • Proof that the borrowers are up-to-date with payments with regard to housing expenses: payment of local property tax and payment of communal costs, in that case.
  • What happens if they can't sell the house?

  • Upon expiry of the fixed term following the death of the holders without the debt having been repaid, will start being collected. Where appropriate, the corresponding foreclosure procedure on the home will be initiated.
  • What is the extent of my heirs' liability for the debt?

  • The claim will always be limited to the assets of the estate itself.
  • Can my heirs keep the house?

  • Yes, to do this they would have to pay off the Reverse Mortgage debt by taking out a normal mortgage with any entity or by paying off the debt with their own funds.

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Reverse Mortgage

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