My 67-year-old dad just confessed to having $100,000 in credit card debt — and he’s retired with a mortgage and no savings. Is he beyond help?

If you have a retired parent with a huge pile of credit card debt — say, a whopping $100,000 worth — you may be eager to help them dig out of that hole. But what if they still have a mortgage and no savings? Is there any hope? The good news is that there are some options you can explore.

Tapping home equity could help

It’s not an unusual thing to be retired with a mortgage these days. As of 2022, 41% of U.S. homeowners aged 65 to 79 had a mortgage on their primary home, including home equity loans and home equity lines of credit (HELOCs), according to data from the Joint Center for Housing Studies of Harvard University.

The good news, though, is that homeowners aged 65 and over have a median home equity of $250,000, according to the National Council on Aging. So if you’re trying to help a parent dig out of credit card debt, using a home equity loan or HELOC could be a wise move. That’s because the rate on one of these products may be substantially lower than the interest rate their credit cards are charging.

Of the two, a home equity loan is more ideal for one big reason. These loans offer the benefit of a fixed interest rate. HELOC interest, like credit card interest, is generally variable, making ongoing payments less predictable.

Downsizing is an option

If you have a retired parent with a pile of credit card debt and a mortgage, downsizing could be the ticket to paying off both. As of 2022, the median mortgage balance among Americans aged 65 to 79 was $110,000, according to the Joint Center for Housing Studies at Harvard. If your parent has $250,000 worth of equity, they may be in a position to pay off their mortgage and credit card balance by moving to a smaller property.

That said, be careful with this approach if the sale proceeds in question won’t allow your parent to buy their replacement home outright. Mortgage rates are fairly high today, with an average of 6.35% for a 30-year loan, per Freddie Mac.

Now, keep in mind that mortgage rates are still generally much lower than credit card interest rates. If downsizing allows your parent to pay off their credit cards but retain a mortgage, that may not be a terrible solution.

You can also, if it’s feasible, have your parent sell their home and move in with you for a few years to get to a better place financially. Of course, the downside here is the loss of privacy for both you and the parent you may be looking to house. But the benefit is allowing your parent to save a few years of Social Security checks so they’re more stable. And if you need help with child care, having a retired parent around could save you money.