What type of mortgage involves the lender making payments to the borrower?

A reverse annuity mortgage is a type of mortgage where the lender makes payments to the borrower, typically in the form of a lump sum or a series of payments. This financial product is primarily designed for older homeowners who have significant equity in their homes and want to convert that equity into cash while allowing them to continue living in their property. The loan is repaid when the homeowner sells the house, moves out, or passes away, at which point the loan amount is deducted from the proceeds of the home sale.

In contrast, a shared equity mortgage involves sharing the appreciation of the property between the lender and borrower, but it does not require the lender to make payments to the borrower. A sale and leaseback arrangement involves selling a property and then leasing it back from the buyer, which does not involve mortgage payments in the traditional sense. A buydown mortgage refers to a method where the upfront costs reduce the interest rate on a loan but does not entail direct payments from the lender to the borrower. Each of these alternatives serves different financial needs and structures, but none replicate the arrangement of a reverse annuity mortgage where the lender disburses funds to the borrower.