There are forward and reverse mortgages. When you want to buy a house you will raise a mortgage loan (forward mortgage) to pay for it. For this you must have a fixed income and there are monthly repayments. If you don’t make repayments, your house can be repossessed. How Does A Reverse Mortgage Work? A reverse mortgage works on equity – once you have a house you can use its equity to raise money. The reverse mortgage amount is the market value of the house less the outstanding mortgage loan. It allows you access to quick, tax free money and your house is the collateral.  A reverse mortgage will never be more than the house value. There are no monthly repayments as long as you live in the house and of course it can be paid off at any stage that suits you.