Tenure vs term reverse mortgage payments

Tenure pays the borrower a fixed amount every month for as long as they live in the home; term pays a larger fixed amount for a set number of years the borrower chooses — both are HECM monthly-payout options under 24 CFR §206.19.

Tenure and term are the two monthly-payment options on a HECM reverse mortgage. Both pay the borrower a fixed amount every month. They differ on one thing: how long the payments last. Tenure pays for as long as the borrower lives in the home; term pays for a fixed number of years the borrower chooses. That single difference changes the size of each payment and how the borrower should plan around it. The matrix compares the two, each cell sourced.

Last reviewed 2026-05-22

How do tenure and term payments compare side by side?

| Dimension | Tenure payments | Term payments | |---|---|---| | How long the payments last | As long as the borrower lives in the home as a principal residence (24 CFR §206.19) | For a fixed period the borrower selects, then payments stop (24 CFR §206.19) | | Size of the monthly payment | Smaller, because the principal limit is spread over an open-ended horizon | Larger, because the same principal limit is spread over fewer years | | What happens when payments end | They do not end on a schedule; they continue while the borrower occupies the home | They stop at the end of the chosen term; the loan balance remains and accrues | | Required monthly payment from the borrower | None while the borrower occupies the home and stays current on taxes and insurance (24 CFR §206.27) | None while the borrower occupies the home and stays current on taxes and insurance (24 CFR §206.27) | | Effect of moving out of the home | Payments stop, because tenure is tied to occupancy | Payments continue to the end of the term regardless of occupancy, but the loan is due if the borrower permanently leaves | | Mortgage insurance | 2% upfront FHA MIP + 0.5% annual MIP on the balance (24 CFR §206.105) | 2% upfront FHA MIP + 0.5% annual MIP on the balance (24 CFR §206.105) | | Typical use case | A borrower who wants a payment they cannot outlive | A borrower with a defined, time-limited income gap to bridge |

When do tenure payments fit?

Tenure fits a borrower who wants a monthly payment they cannot outlive. As long as the borrower stays in the home, the payment keeps coming, which makes it a tool for steady, open-ended income support rather than for a defined need. The payment is smaller than a term payment drawn from the same principal limit, because it is spread over an unknown, potentially long horizon. Tenure suits a borrower whose worry is running out of money late in retirement, and who values payment certainty over payment size.

When do term payments fit?

Term fits a borrower with a specific, time-limited gap to bridge: the years before Social Security or a pension begins, a fixed-length care arrangement, or a known stretch of higher expenses. Because the principal limit is spread over fewer years, each monthly payment is larger than a tenure payment would be. The trade-off is that the payments stop at the end of the chosen term. A borrower choosing term should be clear about what income takes over when the payments end, because the loan balance continues to accrue interest and MIP after the payments stop.

Can you combine tenure and term payments?

A borrower is not limited to a pure tenure or pure term schedule. The HECM also offers modified tenure and modified term, which pair the monthly payment with a line of credit, so a borrower can take a steady payment and keep reserve borrowing power at the same time. A HUD-approved counselor can model the combinations against the borrower's actual income timeline.

How do you choose between tenure and term payments?

The row order is not a ranking. The decisive row is how long the payments last: an open-ended income need points to tenure, a defined time-limited need points to term. A borrower weighing the two should map the payment schedule against their other income sources year by year. Model the payout in the reverse mortgage calculator, and read how the formula handles each option in the methodology page.

Related comparisons

Other reverse-mortgage comparisons that bear on the same decision:

• Lump sum vs line of credit
• Reverse mortgage vs annuity
• Reverse mortgage vs line of credit

The full set is on the comparisons hub.

FAQ