A house-rich, cash-poor retirement doesn’t have to be a dead end. Investment banker Sarthak Ahuja is drawing fresh attention to an overlooked financial tool that could offer elderly Indian homeowners a tax-free monthly income – without selling their homes.
In a LinkedIn post, Ahuja explained how reverse mortgage schemes offered by major Indian banks like SBI, PNB, and HDFC can provide retirees with as much as ₹1.5 lakh per month, by leveraging the value of the home they live in.
“There is one way to get monthly pension of almost ₹1.5 lakhs every month after the age of 60 even if you have no pensionable job, and only one house that you live in,” Ahuja wrote.
Under a reverse mortgage, a senior citizen aged 60 or older can pledge a fully owned residential property to the bank in exchange for regular monthly payments. These payouts are not considered income under Indian tax law, making them completely tax-free.
Ahuja outlines a hypothetical case: a couple owning a ₹4 crore home at age 60, with no heirs dependent on the property. In such a case, a bank could release a portion of the home’s value – around 40%, he suggests – as monthly payouts over 20 years. The borrowers retain the right to live in the house for life, and the bank cannot evict them, even after the payout period ends.
Upon the couple’s death, the heirs can repay the bank’s dues and reclaim the property, or sell the home, clear the debt, and keep the balance. “It’s a great tool of retirement financing for couples who are house rich but cash poor,” Ahuja notes.
While the promise of ₹1.5 lakh per month may depend on variables like age, location, and property valuation, the broader point holds: reverse mortgages could provide a dignified financial cushion for aging homeowners.
How reverse mortgage works
- Homeowner (60+) mortgages their self-occupied home to a bank.
- Bank pays monthly, quarterly, or lump sum – no repayment during lifetime.
- Payouts based on home value (up to 75-80%), typically for 15-20 years.
- Owner retains full right to live in the house.
- After death, heirs can repay and reclaim the home, or let bank auction it.
Eligibility
- Applicant: 60+ years (spouse 55+ for joint loans).
- Property: Residential, self-occupied, no legal issues, 20+ years life.
- Must be fully owned – no pending loans or liens.
Quick steps
- Apply at banks like SBI, Indian Bank, BoB, IDBI.
- Submit ID, address, property docs, legal heir list.
- Bank inspects, values, and starts payouts once approved.
- Property insurance (fire/flood/quake) is mandatory.