Difference Between Mortgage Loan And Reverse Mortgage Loan

Mortgage means to place collateral. Therefore, a mortgage loan in the home loan industry is the loan taken against the property pledged as collateral. The mortgage loan is beneficial in comparison to other instant loans such as personal loans and business loans because it rates interest, processing fees, foreclosure charges & closure conditions, etc. Also referred to as Loan Against Property, a mortgage loan is taken to meet the personal fund requirements such as children’s education, child marriage, medical treatment, business expansion, etc. The mortgage loan by lender Bank/NBFC/HFC is provided only to those borrowers who have a regular flow of legal income and are within the maximum retirement age of 60 years. As a result, senior citizens were excluded from taking mortgage loans. Hence with the view of extending the benefits of mortgage loans to the elderly, the Union Government of India introduced the concept of Reverse Mortgage allowing them to borrow the funds through property mortgage, to meet their financial requirements of day-to-day expenses and increasing cost of medical treatments.

Difference between Mortgage Loan & Reverse Mortgage Loan

Sr. No.

Mortgage Loan

Reverse Mortgage Loan



A mortgage is a type of secured loan as it is secured against the collateral provided. The collateral means pledging of property to obtain the loan.

Loan for senior citizens above 60 years to avail regular/periodical payments from Banks/ NBFC against the mortgage of their house while still retaining the ownership of the house and occupying the same.


Who Can Apply

Salaried and self-employed individuals.

Retired, senior citizens above 60 years.



Can be used for children’s education, child marriage, business expansion.

Can be used only to meet livelihood expenses and medical expenses.

Can be used for purchasing another property.

Cannot be used for any investment or purchasing the property.


Property Type

Ownership residential, as well as commercial property, can be mortgaged.

Only ownership residential property can be mortgaged.

No commercial property is allowed.


Property Ownership

Ownership transferred on the ancestral property as well as property with gift deeds can be considered.

Ancestral property is not considered. The senior citizen must possess a self-acquired and self-owned or jointly owned property with the spouse.


Residential Life Of The Property

5 years – 50 years. Above 50 years structural audit report is mandatory.

Should not be less than 20 years.



All banks and NBFCs.

Only selective nationalized banks and few private banks.


Age Limit

Salaried – up to 60 years

Self-employed – up to 65 years

Senior citizen above the age of 60 years.



Must have regular monthly income flow.

Does not require any Income.



CIBIL score of a minimum of 750 and above is required.

Does not require any credit score requirement.






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