Reverse Mortgage Calculator

Estimate how much you could receive from a reverse mortgage (HECM). See lump sum, monthly payout, and line of credit options based on your home value, age, and current rates.

Reverse Mortgage Details

$
yrs

Must be 62 or older

%
$

Origination fees, closing costs

$

Will be paid off from proceeds

Ready to Calculate

Enter your home details and age to estimate your reverse mortgage proceeds.

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Pro Tip

The line of credit option is often the most flexible choice. Unused funds grow over time, meaning your available credit increases even if your home value stays the same. Consider this option for emergency reserves.

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Understanding Reverse Mortgages

A reverse mortgage, formally known as a Home Equity Conversion Mortgage (HECM), is a special type of loan available to homeowners aged 62 and older. Unlike a traditional mortgage where you make monthly payments to the lender, a reverse mortgage pays you -- converting your home equity into cash that can supplement your retirement income.

The loan doesn't need to be repaid as long as you live in the home as your primary residence, maintain the property, and keep up with property taxes and insurance. The balance grows over time as interest accrues on the amount borrowed, plus mortgage insurance premiums.

HECM loans are insured by the Federal Housing Administration (FHA) and are the most common type of reverse mortgage. The FHA insurance protects borrowers by guaranteeing they'll receive their loan proceeds, and protects heirs by ensuring they never owe more than the home's value (the "non-recourse" feature).

Before obtaining a reverse mortgage, borrowers are required to receive counseling from a HUD-approved counselor. This ensures you fully understand the product, alternatives, and implications for your estate and heirs.

How Proceeds Are Calculated

Principal Limit Calculation

Available Proceeds = (Home Value × PLF) - MIP - Costs - Existing Mortgage

Where:

Home Value = Appraised home value (capped at FHA limit)

PLF = Principal Limit Factor (based on age and interest rate)

MIP = Upfront Mortgage Insurance Premium (2% of home value)

Costs = Origination fees and closing costs

Existing Mortgage = Balance of any current mortgage (must be paid off)

Example

70-year-old with $400,000 home at 5.5% rate:

  • • Max claim amount: $400,000
  • • PLF at age 70: ~0.483 (approx.)
  • • Initial principal limit: $193,200
  • • Upfront MIP (2%): $8,000
  • • Closing costs: $5,000
  • • Existing mortgage payoff: $50,000
  • • Available proceeds: ~$130,200

Frequently Asked Questions

What is a reverse mortgage?
A reverse mortgage (HECM - Home Equity Conversion Mortgage) allows homeowners 62 and older to convert part of their home equity into cash without selling the home or making monthly mortgage payments. The loan is repaid when the homeowner sells, moves out, or passes away.
How much can I get from a reverse mortgage?
The amount depends on your age (older borrowers qualify for more), home value, current interest rates, and any existing mortgage balance that must be paid off first. Typical proceeds range from 40% to 75% of home value.
Do I still own my home with a reverse mortgage?
Yes, you retain full ownership and title to your home. You must continue paying property taxes, homeowners insurance, and maintain the property. The loan becomes due when you permanently leave the home.
What payment options are available?
You can receive funds as a lump sum, monthly payments (tenure or term), a line of credit that grows over time, or a combination. The line of credit option is popular because unused funds grow at the loan rate plus 0.5%.
How accurate is this calculator?
This provides estimates based on simplified HUD principal limit factors. Actual amounts depend on current expected rates, specific HUD tables, and lender policies. Consult a HUD-approved reverse mortgage counselor for precise figures.