Answer Book question
Yes: a reverse mortgage. A homeowner aged 60 or above (spouse 55 or above for a joint loan) can mortgage a self-occupied house to a bank and receive a monthly or lump-sum payment for up to 20 years, or for life under the annuity version, while continuing to live there. The payments are not income for tax purposes. The loan is repaid only when the last borrower dies or moves out permanently, by selling the house; heirs can instead repay and keep it. Few families use it because it feels like losing the house. It is not; it is spending it slowly while still living in it.
Yes: a reverse mortgage. A homeowner aged 60 or above (spouse 55 or above for a joint loan) can mortgage a self-occupied house to a bank and receive a monthly or lump-sum payment for up to 20 years, or for life under the annuity version, while continuing to live there. The payments are not income for tax purposes. The loan is repaid only when the last borrower dies or moves out permanently, by selling the house; heirs can instead repay and keep it. Few families use it because it feels like losing the house. It is not; it is spending it slowly while still living in it.
A retired couple in Kozhencherry, both pensioners with a ₹90 lakh house and two children settled abroad who do not need it, take a reverse mortgage annuity of roughly ₹25,000 a month for life. The house still belongs to them. When both have died, the bank sells it, recovers its dues, and the children receive the surplus.
The National Housing Bank's Reverse Mortgage Loan scheme (2008) and the Reverse Mortgage Loan enabled Annuity (RMLeA, 2009) are offered by most public sector banks and some private ones. whether you may qualify: owner-occupier, 60 plus, clear title, house at least 20 years of residual life; the property is revalued every five years.
Loan-to-value is typically up to 60% of the assessed value, released as monthly instalments, a line of credit, a lump sum for limited purposes such as medical treatment, or a combination; monthly payouts are capped under the scheme (verify the current cap with the bank). Term: up to 20 years for the plain loan; for life with RMLeA, where the bank pays the loan to a life insurer that pays an annuity to the borrower.
Tax: Section 47(xvi) says the mortgage is not a transfer, and Section 10(43) exempts the receipts; the annuity under RMLeA is also exempt. Interest accrues and compounds; the outstanding grows; the borrower never has to pay it and cannot be asked to leave. Settlement on death: heirs may repay and keep the house or let the bank sell; any surplus goes to the estate; any shortfall is the bank's risk, not the estate's.
Clear title and the house in the parent's name, not already gifted to children The bank's valuation and the monthly figure it will offer at current rates Plain loan (20 years) versus RMLeA (lifetime): the annuity version is better for long lives What the children think; surprises at the funeral are the main cause of disputes Ongoing obligations: property tax, insurance and maintenance stay with the borrower
Transferring the house to children first 'to keep it in the family', and then being unable to borrow on it. Reverse mortgage needs the parent to own it. Also: taking a lump sum and spending it; the monthly form is the point.
Kerala has lakhs of large houses owned by elderly parents whose children will never live in them. A reverse mortgage converts the house into the income the children cannot always send. Banks in Kerala do offer it but rarely market it; ask the branch for the NHB scheme by name.
House valued ₹90 lakh, LTV 60%, loan ₹54 lakh. Plain 20-year reverse mortgage at around 10–11%: monthly payout in the region of ₹7,000–9,000 (the bank computes so that the accrued loan equals ₹54 lakh at year 20). RMLeA: the bank pays the ₹54 lakh to an insurer who pays a lifetime annuity; for a 70-year-old couple that can be roughly ₹25,000–35,000 a month, depending on annuity rates. Figures are illustrative; get two bank quotes.
If the parents intend the house to go to a child who needs it, or if the house is jointly owned with a child, this is not suitable. If the house is on leased or disputed land, banks will refuse. If the parents have other assets, an SWP or annuity on those may be simpler (see Vol 1, Retirement).
Get valuations and payout quotes from two banks under the NHB scheme Hold the family conversation with the numbers on the table Choose plain loan or RMLeA with a CA's tax confirmation
My parents gave the house to a son who no longer looks after them. Can they take it back? I have ₹50 lakh for retirement. How much monthly income can it support? (Vol 1)
Retirement & parents
National Housing Bank Reverse Mortgage Loan guidelines (2008) and RMLeA (2009) · Income-tax Act, Sections 10(43) and 47(xvi) · Individual bank product pages (SBI, Canara, Union, Federal and others) Last checked: 22 August 2026. Rates, limits and whether you may qualify change. Confirm with the official source before you act. Ask Kerala Rising: Use only general, non-identifying facts.
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This page is general orientation, not personal insurance, investment, medical, legal, lending, tax, employment, or professional advice. Rules, rates, deadlines, and decisions can change. Confirm the current position with the named official source and use a licensed or qualified professional where your situation requires one. Kerala Rising does not decide whether you may qualify, approve claims, or promise an outcome.