What type of mortgage lets the homeowner convert equity into cash, to be repaid upon vacating the property?

The reverse annuity mortgage is designed specifically to allow homeowners, particularly older adults, to convert a portion of their home equity into cash without having to make monthly mortgage payments. This type of mortgage essentially provides homeowners with funds based on the equity they've built up in their property. The loan is typically repaid when the homeowner sells the home or vacates the property, often due to moving into a different living arrangement or passing away.

It is important to differentiate this mortgage from other options. A home equity line of credit allows homeowners to borrow against their equity but requires regular repayments. Subprime mortgages target borrowers with lower credit scores and come with higher interest rates but do not have the same structure as reverse annuity mortgages. Lastly, while "reverse mortgage" is a common term, the question specifies a reverse annuity mortgage, which emphasizes the particular way funds are received and repayment structure tied to the homeowner vacating the property. Therefore, identifying the most accurate term applicable to the situation is essential, making the reverse annuity mortgage the correct choice.