What type of loan requires a borrower to have no monthly payments?

A reverse mortgage is designed specifically for older homeowners, allowing them to convert a portion of their home equity into cash. In this arrangement, the borrower is not required to make monthly mortgage payments. Instead, the loan is repaid when the borrower sells the home, moves out, or passes away. This feature makes reverse mortgages particularly appealing to retirees looking to supplement their income without the burden of regular mortgage payments.

In contrast, conventional loans, fixed-rate mortgages, and adjustable-rate mortgages all typically require the borrower to make monthly payments on the principal and interest. These types of loans are structured to be repaid over a set period, usually through regular payments that can be budgeted for by the borrower. In summary, the key characteristic that distinguishes a reverse mortgage is the absence of monthly payments, which is not found in the other loan types listed.