HECM Rates and Proprietary Reverse Mortgage Rates in 2019
In addition to understanding the fees you will pay, determining your potential reverse mortgage interest rate is one of the most important factors in deciding whether a reverse mortgage is right for you. When it comes to interest rates, reverse mortgages come in two varieties, fixed-interest reverse mortgages and adjustable-rate reverse mortgages. Both HECMs and proprietary reverse mortgages have fixed-rate and adjustable-rate variations.
Current HECM Interest Rates for Reverse Mortgages
As of October 2018, the interest rate for fixed-rate HECMs was 4.64%, while the interest rate for adjustable-rate HECMs was 4.84%. HECM interest rates did not significantly vary througout 2018; in January 2018, fixed-rate loan rates were 4.90%, while variable-rates sat at 4.65%. However, adjustable rates have risen somewhat significantly in the last 2-3 years; for instance, in January 2016, adjustable-rate HECMs had interest rates as low as 3.54%.
Proprietary and Jumbo Reverse Mortgage Interest Rates
It’s much more difficult to find information about proprietary reverse mortgage and jumbo reverse mortgage interest rates than it is for HECMs. However, in general, proprietary reverse mortgages have rates between 1% and 3% higher than their FHA-insured counterparts. Jumbo reverse mortgages may have even higher interest rates in order to compensate lenders for their increased risk. Partially, these increased rates are a result of the fact that non-HECM reverse mortgages do not have mortgage insurance to protect them from loan defaults.