Can Expats with a vacation home in Mexico use a reverse mortgage to access its value in the same way?

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A reverse mortgage is a mortgage loan, usually secured by a residential property, that enables the borrower to access the unencumbered value of the property. The loans are typically promoted to older homeowners and typically do not require monthly mortgage payments.

Reverse mortgages have become a popular way for seniors to access some of the equity they have invested in their homes. Nearly 43,000 reverse mortgages were issued in the U.S. in 2020.

Seniors with a vacation home in Mexico might be wondering if they can use a reverse mortgage to access its value in the same way. The bad news: there are no reverse mortgages in Mexico. The good news: There is nothing stopping you from using a reverse mortgage in the U.S. to pay for a vacation home in Mexico, as long as you stay within the residency requirements


  • – At the moment, you can’t have a reverse mortgage on a property in Mexico. 
  • – There is no reason why you can’t use a U.S. (or Canadian) reverse mortgage to fund vacations in Mexico or even buy property there.
  • – Make sure that you follow the residency rules for reverse mortgages and explore all the options open to you before taking out a reverse mortgage.

Reverse Mortgages in Mexico

Reverse mortgages are a type of loan that can provide cash for seniors whose net worth is mostly tied up in the value of their homes. A reverse mortgage is a loan for homeowners who are 62 or older and have considerable home equity. It allows these seniors to borrow money against the value of their home and receive funds as a lump sum, fixed monthly payment, or line of credit. The entire loan balance becomes due and payable when the borrower dies, moves away permanently, or sells the home.


Reverse mortgages have become a small but important part of retirement planning in the U.S. and Canada, but less so elsewhere. The Federal District, the seat of the national government, where Mexico City is located, did pass legislation in 2013 that would allow reverse mortgages to be sold in the country to supplement pensions. However, the language refers to the borrower as the ‘pensioner’ and there is no information to indicate reverse mortgages are universally available.

This may come as bad news for seniors who already have a second home in Mexico and want to use some of this equity to fund their retirement living expenses. However, seniors who own property in the U.S. may be able to take out a reverse mortgage in the U.S., and use the funds to buy a property in Mexico or fund their living expenses there.

If you have a reverse mortgage in the U.S. and a vacation home in Mexico, be careful with the residency rules. You must live in the property you have a reverse mortgage on for more than six months a year. Otherwise, your lender may say you’ve broken your borrowing agreement and demand repayment of your loan.

Source: Investopedia

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