The purpose of the paper is to present a reverse mortgage as a financial product intended for the elderly, who need an additional source of income to meet basic living needs. Due to very low pensions and a high age, older people are unable to meet the strict credit requirements set by banks and that leading to financial exclusion issues for the elderly who could potentially solve their problems by pledging real estate, thereby increasing their monthly income and being financially independent . The subject of this paper is an analysis of the basic idea of a reverse mortgage model and how it originated, as well as its advantages, disadvantages and risks when applying this financing model. The reverse mortgage model in the US mortgage market, the UK mortgage market and other selected countries will be elaborated in detail. The paper will also deal with the problem of financial exclusion of the elderly population, will analyze the financial system of the Republic of Croatia, the provision of loans for retirees, and the role of banks and the pension system in the Republic of Croatia. Finally, a detailed analysis of the City of Zagreb as a potential market for a reverse mortgage will be provided.