Reverse Mortgage Calculator
A reverse mortgage lets homeowners aged 62 and older turn part of their home equity into cash without selling the home or taking on a monthly mortgage payment. Instead of you paying the lender, the lender pays you — and the loan balance grows over time, to be repaid when the last borrower sells, moves out permanently, or passes away. This reverse mortgage calculator estimates how much you could receive: enter the age of the youngest borrower, your home's value, any existing mortgage to be paid off, and an expected interest rate.
The amount available is driven by the Principal Limit Factor (PLF) — a percentage set by HUD that rises with the borrower's age and falls as interest rates rise. Multiply the PLF by your home value (capped at the FHA lending limit) and you get the principal limit. After subtracting the upfront mortgage insurance premium, the origination fee, other closing costs and any existing mortgage payoff, what's left is your estimated available proceeds — which you can take as a lump sum, a growing line of credit, or equal monthly payments.
Because the balance compounds while the home value may or may not keep pace, the chart shows how your loan balance and remaining equity could change over the years. Reverse mortgages are powerful but complex products: this tool is an estimate to help you explore your options before speaking with a HUD-approved counselor or lender. The most common reverse mortgage is the federally insured Home Equity Conversion Mortgage (HECM).
$182,750
$201,250
How you could receive the money
$102,250
Cash up front (first-year 60% limit applied).
$182,750
Draw as needed; the unused line grows over time.
$1,215.84/mo
Equal monthly advances for as long as you live in the home.
Loan balance vs. home equity over time
How the proceeds are calculated
| Home value (max claim amount) | $500,000 |
| Principal Limit (age & rate) | $201,250 |
| − Existing mortgage payoff | $0 |
| − Mortgage insurance (IMIP, 2%) | $10,000 |
| − Origination fee | $6,000 |
| − Other closing costs | $2,500 |
| = Estimated available proceeds | $182,750 |
Estimate only. This calculator uses representative HUD Principal Limit Factors and standard HECM assumptions; it is not an offer to lend. Your actual figures depend on the HUD tables in effect, your lender, the exact expected rate, your home's appraised value, and program rules. A single rate is used for both the Principal Limit and balance growth. Borrowers must be 62+, occupy the home as a primary residence, and keep up with property taxes, insurance and maintenance. See our Terms of Use.
Frequently Asked Questions
What is a reverse mortgage?
A reverse mortgage is a loan available to homeowners 62 and older that lets them borrow against their home equity. Unlike a traditional mortgage, you receive money from the lender and make no monthly mortgage payments; the loan balance increases over time and becomes due when you sell the home, move out permanently, or pass away. You remain the owner and must keep paying property taxes, homeowners insurance and upkeep.
Who qualifies for a reverse mortgage?
For a HECM, the youngest borrower must be at least 62 years old, the home must be your primary residence, and you must own it outright or have a low enough mortgage balance that it can be paid off with the reverse mortgage proceeds. You also need to attend a HUD-approved counseling session and demonstrate the ability to keep up with taxes, insurance and maintenance.
How much money can I get from a reverse mortgage?
The amount is the principal limit minus costs and any existing mortgage payoff. The principal limit equals your home value (capped at the FHA HECM lending limit) multiplied by the Principal Limit Factor, which depends on the youngest borrower's age and the expected interest rate. Older borrowers and lower rates produce a higher principal limit. This calculator estimates that figure and breaks it into lump sum, line of credit and monthly payment options.
How do I receive the money?
You can take the proceeds as a single lump sum, as a line of credit you draw from as needed (the unused portion grows over time), or as equal monthly payments — either for as long as you live in the home ("tenure") or for a set number of years ("term"). Many borrowers combine these. A first-year disbursement limit (generally 60% of the principal limit) applies to how much you can take up front.
Do you make monthly payments on a reverse mortgage?
No. You are not required to make monthly mortgage payments. The loan — including interest and mortgage insurance — is repaid when the last borrower leaves the home. You must, however, continue paying property taxes, homeowners insurance, any HOA dues, and keep the home in good repair, or the loan can become due.
What are the downsides of a reverse mortgage?
A reverse mortgage reduces the equity you and your heirs keep, because the balance grows over time. Upfront costs — mortgage insurance, origination and closing fees — can be significant. If you fail to pay taxes and insurance or no longer live in the home, the loan can come due. It can also affect needs-based benefits. Counseling is required precisely because these trade-offs matter.
How is a reverse mortgage repaid?
The loan is repaid when the last borrower sells, permanently moves out, or dies. Typically the home is sold and the proceeds repay the balance; any remaining equity goes to you or your heirs. Because HECMs are "non-recourse," you or your estate never owe more than the home's value at repayment, even if the balance has grown larger.
Definitions
Home Value
The appraised value of your home. For a HECM, the amount used to calculate your principal limit is the lesser of the appraised value and the FHA HECM lending limit (the "maximum claim amount").
Age of Youngest Borrower
The age of the youngest borrower (or eligible non-borrowing spouse). It must be at least 62. The older the youngest borrower, the higher the Principal Limit Factor and the more you can borrow.
Existing Mortgage Balance
Any current mortgage or lien on the home. It must be paid off at closing using the reverse mortgage proceeds (or other funds), which reduces the cash available to you.
Expected Interest Rate
The rate used to look up your Principal Limit Factor and to project how the loan balance grows. Lower expected rates produce a higher principal limit. This calculator uses one rate for both the PLF and balance growth.
Principal Limit
The total amount the reverse mortgage makes available, equal to the maximum claim amount multiplied by the Principal Limit Factor. Costs and any existing mortgage are subtracted from it to arrive at your net available proceeds.
IMIP (Mortgage Insurance)
The Initial Mortgage Insurance Premium, charged by FHA at closing — 2% of the maximum claim amount. An ongoing premium of 0.5% per year is also added to the loan balance. This insurance is what makes the loan non-recourse.