Can You “Add Money” Into a Reverse Mortgage Line of Credit? Yes — And Here’s Why You Might Want To

Most people think of a reverse mortgage as a one-way street — you borrow money from your home equity, and the loan balance grows over time.

But what if you could put money back in — and actually make your line of credit grow even more because of it?

That’s exactly what happens with the reverse mortgage line of credit (HECM LOC). It’s one of the most misunderstood yet powerful financial tools available to homeowners in retirement.

The Reverse Mortgage Line of Credit: A Quick Refresher

A HECM line of credit lets you borrow against your home’s equity as needed, rather than taking all the funds at once.

It’s flexible — you can draw money when you need it, leave the rest untouched, and any unused credit grows over time at the same rate as your loan balance.

That “growth feature” is what sets it apart from a traditional home equity line of credit (HELOC).

If your available credit line today is $100,000 and the growth rate is, say, 5%, then next year — without doing a thing — your available line increases to roughly $105,000.

That’s compounding growth on unused funds.

What Happens When You Pay the Loan Down

Here’s where things get interesting.

If you pay money into your reverse mortgage line of credit, you don’t “build equity” in the traditional sense — but you do reopen that portion of credit, and it continues to grow over time.

Think of it like this:

• You have a $300,000 HECM line of credit.
• You’ve borrowed $100,000 of it so far.
• If you repay $20,000, your loan balance drops to $80,000 — and your available line of credit rises by $20,000 (plus future growth).

So you can access that $20,000 again later — and next year, you’ll have even more because that unused credit line keeps increasing automatically.

In other words: every dollar you pay back reopens credit that can grow with time, often outpacing inflation.

Why You Might Want to Add Money Back In

There are several smart reasons retirees use this feature:

• Strategic cash management: Use your reverse mortgage as a backup reserve. Draw funds during tight months, repay when you sell investments or receive lump-sum income, and let your line grow.
• Long-term growth: By paying down the balance early, you unlock more growing credit capacity — which can provide additional funds years down the line.
• Estate planning: Keeping the balance low helps preserve home equity, while still maintaining future access to cash if needed.
• Interest savings: Reducing your loan balance means less interest accrues, even though your available line continues to expand.

Example: How Paying Down Grows Future Credit

Let’s look at a simplified illustration (rounded for clarity):

That $20,000 paydown not only lowered your loan balance — it boosted your available credit by $20,000 plus the compounding growth that continues on the new, larger total.

The Key Takeaway

Paying into a reverse mortgage doesn’t just lower what you owe — it expands your potential borrowing power in the future.

It’s a flexible, compounding system that rewards homeowners who use their line of credit strategically.

At South River Mortgage, we help clients understand how to leverage the line of credit’s growth feature for long-term security and peace of mind.

Curious how much your credit line could grow — or how much additional credit you could unlock by paying down your balance?

👉 Get your instant reverse mortgage quote today and discover the power of the growing line of credit.

Frequently Asked Questions About Paying into a Reverse Mortgage Line of Credit

Can I make monthly payments on a reverse mortgage?

Yes — payments are optional, but you can absolutely make monthly (or occasional) payments if you choose. Any amount you pay goes directly toward reducing your loan balance and reopening more line of credit that will grow over time.

Is paying into a reverse mortgage the same as building equity?

Not exactly.

Your equity may increase if home values rise — but the primary benefit of paying into a reverse mortgage is that it re-expands your borrowing capacity. The funds you repay become available again AND gain access to the LOC growth feature.

If I repay money, can I take it out later?

Yes. As long as the line of credit remains open and you stay in the home as your primary residence, you can borrow again later. And the unused credit will continue to grow the longer it sits untouched.

Do payments reduce how much interest I pay?

Yes — anytime you lower your outstanding loan balance, less interest accrues going forward. This can help preserve more home equity over time.

Can I repay the loan using proceeds from selling the home?

Yes. Most homeowners (or their heirs) choose to repay the loan when the home is sold. Any remaining equity after payoff belongs to you or your family.

Can I lose access to my line of credit if the housing market dips?

No — this is a major advantage of the HECM line of credit. Once credit is available, it cannot be frozen or reduced due to market changes like home value drops (as long as loan obligations are met).

Does paying into the loan affect my eligibility for benefits?

Reverse mortgage proceeds typically don’t impact Social Security or Medicare, but interactions with Medicaid and other needs-based programs can vary. It’s smart to review with a benefits advisor before making large draw or repayment decisions.

Can I choose when and how much to repay?

Yes — you’re always in control.

There’s no required payment schedule. Whether you want to make payments monthly, annually, or only when cash flow allows, the choice is yours.