All over the world, there is a trend of demographic aging of the population, which leads to a financial strain on many economies. Economic policymakers face the growing problem of financing the elderly people with limited state budgets. Due to the increase in the number of elderly people, public expenditures for pensions, health and social care are also increasing. Therefore, aging of the population is often associated with reduction of life quality of the elderly population. Because of that, it is necessary to find an efficient solution that will enable this category of the population a dignified life. A reverse mortgage is imposed as one of the possible solutions. A reverse mortgage is a relatively new financial product that enables the older population, who own valuable real estate, an additional source of funding. The users of the reverse mortgage borrow money from the bank using their own real estate as a guarantee for the obtained funds. Users are not obliged to make monthly debt repayments, but creditor collects the debt of the users after they die or move. With the funds, users can improve their current quality of life, cover their everyday and medical expenses, repair their house or apartment and reduce their existing mortgage debt. In that way, the financial and social exclusion of the older population is reduced. The aim of this paper is to determine the possibility of reverse mortgage as an instrument for financing the older people and determine the potential for the development of the reverse mortgage model on the Croatian financial market.