The cost of getting a reverse mortgage from a private sector lender tends to exceed the costs of other types of mortgage or equity conversion loans. Exact costs however are dependant on the particular reverse mortgage program that the borrower aquires. For the most common type of United States reverse mortgage, the HECM (Home Equity Conversion Mortgage), there is an insurance premium of 2 percent of the loan and a 2 percent origination fee in addition to normal closing costs, which are typically some thousands of dollars, but vary depending on the third-party costs (appraisal fees, title searches, etc.) that must be undertaken. Thus a $200,000 loan would have $8,000 in costs beyond the normal closing costs added onto the loan at the outset. Other programs tend to skip the insurance premium, but still require the origination fees and closing costs, though some programs will waive the initial costs if the borrower is willing to borrow the maximum or close to the maximum amount that they are eligable to receive. In addition, there is a monthly service charge of between $25 and $35 that is usually added to the total amount of the loan.

In all of these cases, the costs of a reverse mortgage can typically be financed through the loan itself, with the costs and fees being rolled directly into the principal balance of the loan, rather than paid by the borrower in cash. While this does permit borrowers with little or no available cash to get a reverse mortgage, it does mean that the initial loan principal will be increased, and consequently, that the fees will begin accruing interest.

Interest rates on reverse mortgages are determined on a program-by-program basis, but are typically similar to interest rates offered by Adjustible Rate Mortgages (ARMs), or at time of this writing, approximately 7-8%. All major reverse mortgage programs have adjustable interest rates that are adjusted on an annual, semi-annual, or monthly basis. Due to the fact that reverse mortgages have no fixed duration, there are no reverse mortgages with fixed interest rates.

Some state and local governments offer low-cost reverse mortgages to seniors, which tend to have more favorable interest rates and fewer or no fees associated with them. However, as mentioned above, these programs are typically very restrictive in terms of qualification and location, and many regions, states, and areas do not have such programs at all.