
The National Council on Aging (NCOA) concluded research in 2017 documenting the Awareness of Home Equity Products Among Older Homeowners and Financial Advisors (March, 2017). The study included sessions with 1,002 older homeowners (who had not used a home equity product) and 254 financial advisors (with credentials including FINRA Series 6 or 7, Certified Financial Advisor or Planner, or NMLS Mortgage Loan Broker). The study confirmed wide gaps of knowledge and understanding of the importance and potential home equity can provide to enhance retirement security.
Older Adults Top Retirement Fears
- 91% – Unaffordable medical and long term care expenses.
- 83% – Running out of money (outliving savings).
- 80% – Want to remain in their homes, but don’t know how to accomplish this.
- 50% – Concerned they won’t be able to afford home maintenance.
- 35% – Lose ability to provide financial help or inheritance to family members.
Home Equity: An Overlooked Resource
The NCOA study confirmed:
- 80% of homeowners 65+, who own their own homes, home equity represents 60-80% of their total net worth, making it an essential consideration in addressing retirement needs.
- The majority of those 75 and older own their homes free and clear.
- Only 20% of older homeowners indicated a willingness to draw on home equity in retirement.
- This research suggests that lack of understanding of existing home equity release products and worries about making a wrong choice contribute to this reluctance.
Significant Findings
- In spite of the value and importance of home equity as a retirement resource, older homeowners and professional advisors both do not understand and are reluctant to use home equity products.
- Based on the product name alone. Older homeowners and professional advisors demonstrated a strong negative bias against the Reverse Mortgage Line of Credit – driven by preconceived ideas and misconceptions of the product. Respondent preferences were:
- 68% – Home Equity Line of Credit
- 32% – Reverse Mortgage Line of Credit
- Based on product features alone. However, when the names were concealed and only the features of both products compared (shown below as Loan Type A (Home Equity Line of Credit) and Loan Type B (Reverse Mortgage Line of Credit), the results reversed. Both consumers and professionals showed strong preference for the Reverse Mortgage Line of Credit, citing it as less risky and more desirable than a traditional Home Equity Line of Credit. Respondent preferences were:
- 58% – Reverse Mortgage Line of Credit
- 42% – Home Equity Line of Credit
- Older homeowners are open to education and information to help them understand safe and appropriate ways to use home equity to augment their retirement needs

Conclusions
- The desire to remain at home and maintain a quality of life in retirement is at odds with consumer and professional advisor understanding and acceptance of various options to monetize home equity as a fundamental retirement resource.
- The research clearly demonstrates that home equity products are poorly understood.
- Given the large proportion home equity is to net worth, it is essential that older homeowners have access to objective and up-to-date information on home equity utilization, and how to safely access it to meet the large and growing financial concerns they face in retirement.
- An important barrier is the strong negative bias the research revealed among both consumers and trusted advisors associated with the name Revere Mortgage Line of Credit.
- Education and open-minded attitudes are needed to overcome misguided perceptions, so consumers and their advisors can objectively assess complete information as they consider if and which home equity solution is the best fit for their individual needs.
- Consumers have acknowledged limited understanding of these options, and expressed a desire from independent third parties to educate them on best use for their retirement plans.
Disclaimer: The research was funded by a grant from Reverse Mortgage Funding, LLC and conducted in partnership with the National Council on Aging and Stephanie Moulton, PhD, at the John Glenn College of Public Affairs, at Ohio State University. NCOA retained control of the content and conclusions. Content for this article was drawn from the report published by the NCOA. For more information, please visit ncoa.org/Home Equity.