An asset depletion loan lets you qualify for a mortgage using your savings and investments instead of a regular paycheck. It’s perfect for people who have a lot of money saved but little or no monthly income — like retirees. The lender turns your assets into a monthly “income” figure on paper, then uses that to approve your loan. I help many asset-rich borrowers use these loans, and they’re a genuine lifesaver for the right person. Let me explain simply.
How an Asset Depletion Loan Works
Most loans ask, “How much do you earn each month?” But some people — especially retirees — don’t have a steady paycheck, even though they have plenty of money in the bank. An asset depletion loan asks a different question: “How much money do you have saved?”
The lender takes your eligible assets (savings, investments, retirement accounts) and divides them over a set number of months to create a monthly income figure. It’s called “depletion” because the math pretends you’re slowly spending down those assets over time — even though you usually don’t have to actually spend them.
Think of it like a big jar of savings. Instead of asking what flows into the jar each month, the lender looks at how full the jar is and figures out how much you could take out each month. That number becomes your qualifying income.
Who Qualifies for an Asset Depletion Loan?
These loans fit a specific but common group of people:
| Who It Fits | Why |
|---|---|
| Retirees | Have savings but little monthly paycheck income |
| Early retirees | Not yet drawing Social Security or a pension |
| Business owners | Strong assets but income that varies |
| High-net-worth buyers | Wealth in investments rather than a salary |
| Between jobs | Solid savings but no current paycheck |
The common thread: you have significant assets, but your monthly income is low or hard to document. To understand the broader family of flexible loans, see our guide on what a non-QM loan is.
What Counts as an Asset?
Lenders usually count things like:
- Checking and savings accounts
- Investment accounts (stocks, bonds, mutual funds)
- Retirement accounts (often counted at part of their value, especially before retirement age)
- Money market accounts
Every lender has its own rules about what counts and how much of each asset it uses, so always ask. Generally, the more liquid (easy to access) your assets, the more they help.
What to Expect
Asset depletion loans are a type of non-QM loan, so a few things are common:
- A larger down payment than a standard loan.
- Good credit to balance the flexible income approach.
- Substantial, well-documented assets — the more you have, the higher your qualifying income.
- A slightly higher cost than a traditional loan, in exchange for the flexibility.
If you’re a retiree weighing your options, you may also want to compare a home equity loan if you already own a home and want to tap its value.
An asset depletion loan is a smart tool for people who are rich in savings but short on monthly income — especially retirees and early retirees. Instead of a paycheck, the lender turns your assets into a qualifying income figure. Expect a larger down payment, good credit, and solid documented assets. If a traditional lender has told you that you don’t earn enough, but you have a healthy nest egg, an asset depletion loan may be exactly the path you need. Compare several lenders, since their asset rules vary widely.
Frequently Asked Questions
Do I have to spend my assets to get an asset depletion loan?
No. Despite the name, you usually don’t have to actually spend down your savings. “Depletion” just describes the math the lender uses — they calculate how much you could withdraw each month to create a qualifying income figure. Your money stays yours. The lender simply uses the size of your assets to show you can afford the payment. This is what makes these loans ideal for retirees who want to keep their nest egg intact while still qualifying for a mortgage.
Can retirees use an asset depletion loan?
Yes — retirees are the most common users. Many retirees have significant savings and investments but little monthly paycheck income, which makes traditional qualifying hard. An asset depletion loan solves this by turning their nest egg into qualifying income. Early retirees who aren’t yet drawing Social Security or a pension benefit especially. If you have strong assets but a lender says your monthly income is too low, an asset depletion loan is often the right solution to explore.
How much of my retirement account counts toward the loan?
It varies by lender and your age. Many lenders count only part of a retirement account’s value — often because there can be taxes or penalties to access it early. Once you reach retirement age, lenders may count more of it. Liquid assets like savings and taxable investment accounts usually count more fully. Because rules differ so much between lenders, ask each one exactly how they treat retirement accounts and what percentage of each asset they’ll use.
References
- RefiGuide (2026). How Do Asset Depletion Mortgages Work? https://www.consumerfinance.gov/rules-policy/final-rules/
- Consumer Financial Protection Bureau. (2024). Mortgages and loan options.
Home Equity Mart is not a lender and does not make credit decisions. This article is general education, not financial or legal advice. Verify any lender’s license at NMLS Consumer Access.
