Reverse Mortgage Calculator

About the Reverse Mortgage Calculator

A reverse mortgage — most commonly a Home Equity Conversion Mortgage (HECM) — allows homeowners aged 62 and older to convert part of their home equity into cash without making monthly mortgage payments. The loan is repaid when the borrower sells the home, moves out permanently, or passes away.

The amount you can borrow depends on three main factors: your age (older borrowers qualify for more), your home's appraised value (up to the FHA lending limit), and current interest rates (lower rates mean higher proceeds). This calculator uses simplified principal limit factors based on HUD guidelines to estimate your available proceeds.

This is an estimation tool only. Actual HECM proceeds depend on additional factors including property type, existing mortgage balances, and upfront costs. Always consult a HUD-approved HECM counselor before applying. Understanding the approximate principal limit before you meet with a counselor empowers you to ask the right questions and evaluate whether a reverse mortgage will meaningfully supplement your retirement income or cover essential expenses.

When This Page Helps

Reverse mortgages are complex products with significant trade-offs. Getting an estimate before speaking with a lender helps you understand whether the proceeds will meet your needs and how much equity you're converting. Use this calculator as a starting point to compare the lump sum, line of credit, and monthly payment options. Understanding the trade-offs before you engage with a lender also protects you from high-pressure sales tactics that are unfortunately common in the reverse mortgage industry.

How to Use the Inputs

1. Enter the youngest borrower's age (must be 62 or older).
2. Enter your home's estimated current market value.
3. Enter any existing mortgage balance that must be paid off first.
4. Set the expected interest rate (check current HECM rates).
5. Review the estimated available proceeds after paying off existing liens.
6. See how the proceeds translate to monthly payments over various terms.

Example Calculation

Tips & Best Practices

• The older you are when you take a reverse mortgage, the higher the principal limit factor and the more you can borrow.
• Lower interest rates significantly increase available proceeds — even a 0.5% drop can mean thousands more.
• The FHA lending limit for HECM loans is $1,249,125 (2026) — home values above this are capped.
• A line of credit option grows over time at the same rate as the loan accrues interest, potentially increasing your available funds.
• You remain responsible for property taxes, insurance, and maintenance — failure to pay can trigger foreclosure.
• HECM loans are non-recourse: you (or your heirs) will never owe more than the home's value at sale.

How HECM Reverse Mortgages Work

Unlike a traditional mortgage where you make monthly payments to the lender, a reverse mortgage pays you. The loan balance grows over time as interest and MIP accrue. You make no monthly payments — the entire balance is repaid when you leave the home or pass away.

Principal Limit Factors

HUD publishes principal limit factor tables that determine the percentage of your home's value you can access. These factors depend on the youngest borrower's age and the expected interest rate. At age 62 with a 6% rate, the factor might be around 0.42 (42%). By age 80, it could exceed 0.58 (58%).

Current HECM Limit

For 2026, the FHA HECM lending limit is $1,249,125. Home values above that amount are capped when estimating available proceeds.

Is a Reverse Mortgage Right for You?

Reverse mortgages work best for homeowners who plan to stay in their home long-term, have significant equity, need supplemental retirement income, and have no plans to leave the home to heirs debt-free. If you're considering leaving your home within a few years or want to preserve equity for inheritance, other options like a HELOC or downsizing may be more appropriate.

Frequently Asked Questions

• What is the minimum age for a reverse mortgage?

  The youngest borrower on the title must be at least 62 years old for a HECM reverse mortgage. If you have a younger spouse, their age is used for the calculation, resulting in lower proceeds. Some proprietary (jumbo) reverse mortgages may accept borrowers as young as 55.

• Do I still own my home with a reverse mortgage?

  Yes, you retain title to your home. The reverse mortgage is a lien against the property, just like a regular mortgage. You must continue to pay property taxes, homeowners insurance, and maintain the property.

• How is a reverse mortgage repaid?

  The loan becomes due when the last surviving borrower sells the home, moves out permanently (e.g., to a nursing facility for 12+ months), or passes away. The home is typically sold and proceeds pay off the loan. Any remaining equity goes to the borrower or their heirs.

• What happens if the loan balance exceeds the home value?

  HECM loans are non-recourse, meaning neither you nor your heirs are responsible for the shortfall. FHA insurance covers the difference. Your heirs can never be pursued for more than 95% of the home's appraised value.

• Can I take the proceeds as monthly payments?

  Yes, you can choose a tenure plan (monthly payments for as long as you live in the home), a term plan (monthly payments for a set period), a line of credit, a lump sum, or a combination. Each option has different pros and cons.

• What are the costs of a reverse mortgage?

  Costs include an upfront mortgage insurance premium (2% of the home value), an origination fee (up to $6,000), ongoing MIP (0.5% annually), and standard closing costs. These can be financed into the loan, reducing your upfront out-of-pocket expense.