Reverse Mortgage Calculator
Estimate your HECM proceeds, closing costs, and loan balance projection — powered by 2026 FHA limits and official HUD Principal Limit Factor tables.
2026 HECM limit is $1,249,125. Values above this are capped for FHA calculations.
Paid off at closing — deducted from your proceeds automatically.
Minimum age is 62. Older borrowers access a higher percentage of their equity.
Typical HECM adjustable rates are 6.0–7.5%. Lower rate = larger proceeds.
Enter 1–40 years. The chart will show loan balance vs. home value for that period.
Enter your home value, age, and interest rate on the left — then tap Calculate to see your estimated proceeds, full cost breakdown, and a balance projection.
What Is a Reverse Mortgage?
A reverse mortgage lets homeowners aged 62 or older convert a portion of their home equity into cash — without selling the house, making monthly mortgage payments, or giving up the title. Instead of you paying the bank, the bank pays you.
The loan only comes due when you permanently leave the home — whether that means moving out, selling, or passing away. At that point, the home is typically sold to repay the loan balance, and any remaining equity goes to you or your heirs.
The most important thing to understand: you keep full ownership of your home throughout the life of the loan. The lender cannot force you out as long as you live there, keep up with property taxes, maintain homeowners insurance, and keep the property in reasonable condition.
The most common type in the United States is the Home Equity Conversion Mortgage (HECM) — a federally insured program backed by the FHA and regulated by HUD. It accounts for the vast majority of reverse mortgages issued each year. Our calculator uses the official HECM formulas and the 2026 lending limit of $1,249,125.
How a Reverse Mortgage Actually Works
When you take out a reverse mortgage, the lender calculates how much of your home equity you can access. That amount is called the Principal Limit. It's determined by three things: your age, your home's appraised value (or the HECM lending limit, whichever is lower), and the current expected interest rate.
Closing costs — including an origination fee, upfront mortgage insurance, appraisal, and title fees — are deducted from the principal limit. What's left after those costs (and any existing mortgage you need to pay off) is your net proceeds.
The Loan Balance Grows Over Time
Because you're not making monthly payments, interest compounds and gets added to the loan balance each month. On a HECM, an additional 0.5% annual mortgage insurance premium (MIP) also accrues on top of the interest rate. This means the loan balance grows steadily the longer you stay in the home.
That's exactly what the balance projection chart in this calculator shows — how your loan balance builds year by year compared to how your home's value is likely to grow (estimated at 3% annually). In many scenarios, especially for younger borrowers or in periods of high interest rates, the loan balance can eventually exceed the home's value.
Non-recourse protection: If the loan balance grows to exceed what your home sells for, neither you nor your heirs owe the difference. The FHA insurance fund covers the shortfall. You can never owe more than the home is worth at the time of sale.
Who Pays Back the Loan?
The loan becomes due when one of these events occurs: you permanently move out of the home, you sell the property, or the last borrower on the loan passes away. At that point, the estate has several options — sell the home and use the proceeds to pay off the loan, refinance into a traditional mortgage to keep the home, or pay off the balance with other funds and retain the property.
Heirs are typically given 6 to 12 months to arrange repayment, and extensions are often available.
How This Calculator Figures Out Your Proceeds
This isn't a rough estimate tool — it uses the same underlying mechanics that HECM lenders apply when quoting a loan.
Step 1: The Principal Limit Factor (PLF)
The PLF is a number published by HUD that tells you what percentage of your home's value (up to the HECM limit) you can borrow. It ranges from roughly 29% at age 62 with a 9% rate, all the way up to 75.6% at age 90 with a 5% rate.
The PLF increases with age (older borrowers get more) and decreases as interest rates rise (higher rates mean the loan balance will grow faster, so lenders lend less). This calculator uses the full official HUD PLF table and interpolates between rate breakpoints, so the result closely matches what a real lender would quote.
Example: A 72-year-old with a $350,000 home at a 6.5% expected rate has a PLF of roughly 51.3%. That means the gross principal limit is about $179,550. After subtracting roughly $16,400 in closing costs, the net proceeds would be approximately $163,000.
Step 2: Maximum Claim Amount (MCA)
The MCA is simply the lower of your home's appraised value or the 2026 HECM lending limit of $1,249,125. If your home is worth $400,000, your MCA is $400,000. If it's worth $1,800,000, your MCA is still capped at $1,249,125 — which is why high-value homeowners sometimes look at jumbo reverse mortgages instead.
Step 3: Closing Costs
Closing costs on a HECM are regulated by FHA. Here's what each one covers:
| Cost Item | How It's Calculated | Typical Range |
|---|---|---|
| Origination Fee | 2% of first $200K + 1% above, min $2,500, max $6,000 | $2,500–$6,000 |
| Upfront MIP | 2% of the Maximum Claim Amount | $3,000–$24,982 |
| Appraisal Fee | Independent FHA-approved appraiser | $500–$900 |
| Title & Escrow | Title search, insurance, escrow services | $1,000–$3,000 |
| Settlement & Recording | Closing agent, county recording fees | $800–$1,500 |
| HUD Counseling | Mandatory independent counseling session | $125–$200 |
| Credit Report | Lender pulls credit for financial assessment | $50–$75 |
These costs are almost always financed into the loan rather than paid out of pocket, which is why the calculator deducts them from your gross principal limit to arrive at your actual net proceeds.
Three Ways to Receive Your Money
A reverse mortgage isn't one-size-fits-all when it comes to how you access the funds. You have three options, and the right one depends entirely on what you need the money for.
One payment at closing. This is the only option that locks in a fixed interest rate. Best if you have a large specific need — paying off a mortgage, covering medical expenses, or eliminating high-interest debt.
A steady income stream — either for as long as you live in the home (tenure) or for a set number of years (term). Best for supplementing Social Security or a pension when monthly cash flow is the priority.
Draw only what you need, when you need it. The unused portion grows at the loan's interest rate over time — meaning the longer you wait to draw, the more you have available. The most flexible option, and the most popular.
You can also combine options — for example, take a partial lump sum at closing to pay off your existing mortgage, then set up a line of credit for future use. Ask your lender about hybrid structures.
Why the Line of Credit Growth Matters
The line of credit growth feature is one of the most underappreciated aspects of reverse mortgages. If you establish a $150,000 line of credit at age 68 and never touch it, that line could be worth $240,000 or more by age 78 at a 6% rate — even if your home's value hasn't changed. This makes the LOC option a powerful hedging tool for future healthcare costs or long-term care needs.
HECM vs. Jumbo Reverse Mortgage — Which One Applies to You?
Most homeowners use a standard HECM. But if your home is worth significantly more than $1,249,125, a jumbo (or proprietary) reverse mortgage may unlock substantially more equity.
HECM (FHA-Insured)
The HECM is the most common type for a reason. It's backed by the federal government, which means lender rules are standardized, consumer protections are baked in, and the non-recourse guarantee is solid. The mandatory HUD counseling requirement also means borrowers go into the loan understanding how it works. The downside is the lending cap — if your home is worth $2 million, you're still limited to proceeds based on $1,249,125.
Jumbo / Proprietary Reverse Mortgage
These are privately issued loans with no FHA backing and no government lending cap. Lenders set their own rules, which can mean more proceeds for high-value homes — sometimes up to $4 million or more. The trade-off is that proprietary loans have fewer consumer protections, may carry higher interest rates, and are not available from every lender. They also don't carry the same non-recourse guarantee backed by FHA insurance, though many private lenders build similar protections into their contracts.
Rule of thumb: If your home is worth less than $1.25 million, stick with the HECM. If it's worth more than $1.5 million and you want to access a large portion of that equity, get quotes for both and compare the net proceeds and total costs carefully.
The Real Pros and Cons — No Sales Pitch
Reverse mortgages have a complicated reputation, and some of that is deserved. They're genuinely useful for the right borrower, and genuinely risky for the wrong one. Here's an honest look at both sides.
✓ Advantages
- No monthly mortgage payments required
- Stay in your home as long as you live there
- Proceeds are tax-free (not counted as income)
- Non-recourse — never owe more than the home sells for
- Line of credit grows even if home value drops
- Helps bridge the gap before Social Security or pension income
- Can eliminate an existing mortgage and free up cash flow
✗ Drawbacks
- Loan balance grows monthly — can erode equity quickly
- Closing costs are high relative to other loan types
- Heirs may inherit little or no equity
- Must keep paying property taxes, insurance, and maintenance
- Only one spouse needs to be 62 — but non-borrowing spouses face risks if borrower dies first
- Moving to assisted living or a nursing home triggers the loan
- Reduces eligibility for needs-based government assistance programs
Who a Reverse Mortgage Actually Makes Sense For
A reverse mortgage is not a last resort for people who are broke. When used strategically, it can be a meaningful retirement planning tool. Here's who genuinely benefits.
You Plan to Stay in the Home Long-Term
The high upfront costs — typically $15,000 to $30,000 — only make financial sense if you stay in the home long enough for the benefits to outweigh them. If there's a real chance you'll move within five years, the math usually doesn't work in your favor. For people who want to age in place indefinitely, it's a different story.
You Need to Eliminate a Mortgage Payment
Carrying a $1,200 monthly mortgage payment into your 70s on a fixed income is stressful. If your home has enough equity, a reverse mortgage can pay off that balance entirely and permanently eliminate the payment — without you having to sell or downsize. For cash flow-constrained retirees, that change alone can be significant.
You Want a Safety Net, Not a Paycheck
Many financial planners recommend establishing a reverse mortgage line of credit early — even before you need the money. The line grows over time, and having it in place means you have a buffer if your investment portfolio takes a hit, you face an unexpected medical expense, or you need long-term care later in life.
You Have No Intention of Leaving the Home to Your Heirs
If your estate plan doesn't depend on passing the home on to children or other beneficiaries, the gradual reduction in equity matters a lot less. Spending your equity on your own retirement is a perfectly reasonable choice — it's what the asset is for.
A reverse mortgage is probably not right for you if: you plan to move within a few years, you want to leave the home to your children with minimal debt on it, you have enough retirement income already, or you're considering it primarily to fund discretionary spending rather than a genuine financial need.
Basic Eligibility Requirements
Before a lender will approve a HECM, you need to meet several requirements. Most are straightforward.
Age
The youngest borrower on the loan must be at least 62. If you're married and one spouse is younger than 62, they can still be included as a non-borrowing spouse with certain protections — but the loan amount will be calculated based on the younger spouse's age, which reduces the proceeds.
Home Equity
You don't need to own your home free and clear — but you do need substantial equity. Any existing mortgage or home equity line of credit must be paid off at or before closing, typically using the reverse mortgage proceeds. Most lenders want to see that you're borrowing less than your home's value after all costs are accounted for.
Primary Residence
The home must be your primary residence. You must live there for at least six months of every year. Vacation homes, investment properties, and rental properties don't qualify for a HECM.
Property Type
Single-family homes and HUD-approved condominiums qualify. Some multi-unit properties (up to 4 units) are eligible if the borrower lives in one of the units. Manufactured homes built after June 1976 may qualify if they meet FHA standards. Cooperative housing units generally do not qualify.
Financial Assessment
Since 2015, HUD requires lenders to evaluate whether you have the financial capacity to keep up with property taxes, homeowners insurance, and basic maintenance. If there's concern about your ability to meet those obligations, the lender may require a Life Expectancy Set-Aside (LESA) — essentially an escrow account funded from your proceeds — to cover those expenses going forward.
HUD Counseling
Before you can apply, you must complete a counseling session with a HUD-approved independent counselor. This session covers how the loan works, alternatives to consider, and the financial implications for you and your estate. It costs around $125 and can be done over the phone or in person. The counselor is not affiliated with any lender — their job is to help you make an informed decision, not to sell you a loan.
Frequently Asked Questions
No. All calculations happen entirely in your browser. Nothing you enter — your home value, age, mortgage balance — is sent to a server, stored in a database, or shared with any third party. The moment you close or refresh the page, the data is gone. This tool is a math calculator, nothing more.
The calculator uses the official HUD PLF table and the 2026 HECM limit of $1,249,125, so the gross principal limit figure should be quite close to what a lender quotes for a standard HECM. Closing costs are estimated using FHA formulas but vary by location and lender — title fees in particular differ by state. Treat the result as a well-informed ballpark: accurate enough to understand whether a reverse mortgage is financially viable for your situation, but not a substitute for a formal quote.
When the last borrower on the loan passes away, the loan becomes due. Your heirs have up to six months — with extensions available in some cases — to either pay off the balance and keep the home, sell the home and use the proceeds to repay the loan, or walk away and let the lender sell it. If the sale price exceeds the loan balance, the heirs receive the difference. If the home sells for less than the balance, the FHA insurance covers the shortfall — your heirs owe nothing out of pocket.
You can — but only if you stop meeting the basic loan obligations. Failing to pay property taxes, letting homeowners insurance lapse, or allowing the home to fall into serious disrepair are the main reasons reverse mortgage borrowers face foreclosure. The lender cannot evict you simply because the loan balance grows or because your home's value drops. As long as you live in the home as your primary residence and keep up with taxes and insurance, you cannot be forced to leave.
Yes, but with caveats. Only the borrower aged 62 or older is listed on the loan. The younger spouse is classified as a non-borrowing spouse and is entitled to remain in the home if the borrowing spouse passes away — as long as certain conditions are met, including that the home was their primary residence and they continue paying taxes and insurance. However, because the loan is based on the older borrower's age, this situation gets complicated quickly. The proceeds will be calculated using the younger spouse's age, which reduces the amount you can access. Talk to a HUD counselor about how this applies to your specific situation before proceeding.
Generally no. Reverse mortgage proceeds are loan advances, not income, so they don't affect Social Security or Medicare benefits. However, if you receive Medicaid or Supplemental Security Income (SSI), this is where you need to be careful. Medicaid has asset limits, and keeping a large lump sum from a reverse mortgage in a bank account can push you over those limits and make you ineligible. Receiving funds as a monthly payment or drawing from a line of credit strategically — rather than taking a lump sum — can help preserve your Medicaid eligibility. A financial advisor who specializes in Medicaid planning is worth consulting before you proceed.
Yes, at any time and with no prepayment penalty. Some borrowers take out a reverse mortgage to eliminate an existing mortgage payment, then later refinance back into a traditional mortgage if their financial situation improves. Others make voluntary payments to keep the loan balance from growing. There's no obligation to pay anything while you're living in the home, but you're always free to do so.
No. The IRS treats reverse mortgage proceeds as loan advances, not income. Whether you receive a lump sum, monthly payments, or draw from a line of credit, none of it is subject to federal income tax. It also won't push you into a higher tax bracket or affect the taxability of your Social Security benefits. That said, tax laws can change, and individual circumstances vary — it's always worth confirming with a tax professional.
The projection period is the number of years you want the calculator to model the loan balance growth. It shows you a bar chart of how your loan balance will grow over that period (at the interest rate plus 0.5% annual MIP for HECMs) compared to how your home's value is projected to grow at a conservative 3% annual appreciation rate. This helps you visualize at what point, if ever, the loan balance might approach or exceed your home's estimated value. You can enter any number between 1 and 40 years.