Reverse Mortgage

In mortgage financing, a reverse mortgage refers to a financial transaction in which a property owner mortgages their property to obtain a loan. The loan is paid out in installments throughout the mortgage term.

This differentiates a reverse mortgage from a conventional mortgage in which a loan is obtained to finance a property and repaid in equal installments throughout the loan term.

In a reverse mortgage, the mortgagee (a bank, insurance company or pension fund) gives you money in exchange for a portion of your home equity. The debt is secured by your property.

Typically, total interest charges are deducted from the amount paid for your home equity before it is paid out.

Only a small number of Swiss banks provide reverse mortgages. These are listed in the guide to reverse mortgages.

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