Reverse Mortgage Calculator

Enter the youngest borrower's age (62+), your home value, any mortgage still owed, and an expected rate to get a rough estimate of the cash a HECM reverse mortgage could free up. Educational only — real figures come from a HUD-approved counselor.

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How a HECM reverse mortgage works

A Home Equity Conversion Mortgage (HECM) — the FHA-insured loan most people mean by "reverse mortgage" — lets homeowners 62 and older convert home equity into cash with no monthly mortgage payments. Interest accrues onto the balance instead of being paid down, and the loan comes due when the last borrower sells, moves out for good, or dies. You keep the title the whole time; the lender holds a lien, exactly like a regular mortgage. You do stay on the hook for property taxes, insurance, and upkeep — falling behind on those can trigger default.

How much you can borrow is set by HUD's principal limit factor (PLF) tables: a percentage of your home's value (capped at the 2026 FHA HECM limit of $1,249,125) that rises with the youngest borrower's age and falls as expected interest rates rise. Any existing mortgage must be paid off from the proceeds first — for many borrowers, killing that monthly payment is the entire point.

The formula (a simplified estimate)

Available ≈ PLF × min(Home value, $1,249,125) − Mortgage payoff − ~$15,000 costs

This calculator approximates the PLF as 0.30 + 0.007 × (age − 62) at a 7% expected rate, with the base rising to 0.35 at 6% and 0.40 at 5%. That's a deliberately simplified stand-in — actual HUD PLF tables vary by exact age and rate combination, and your quote will differ. The ~$15,000 covers typical upfront costs: the 2% FHA initial mortgage insurance premium, origination, and closing fees, which are usually financed out of the proceeds. Treat every number on this page as a rough educational estimate; the real figures come from a HUD-approved counselor and lender.

Worked example

A 70-year-old with a $500,000 home, a $120,000 remaining mortgage, and an expected rate of 6%: the estimated PLF is 0.35 + 0.007 × 8 = 40.6%, so the principal limit is about $203,000.

Subtract the $120,000 payoff and roughly $15,000 in upfront costs, and the estimated funds available are $68,000 — plus no more monthly mortgage payment, which was costing real money every month too.

The two levers, your heirs, and the mandatory counseling

Only two inputs move the needle much: age and rates. Each year of age adds roughly 0.7 percentage points of borrowing power, and a one-point drop in expected rates adds about five — so a 75-year-old at 5% can tap nearly half the home's value (a 49.1% PLF in this model) while a 62-year-old at 7% gets under a third. If your number disappoints, waiting is genuinely a strategy.

For heirs: a HECM is non-recourse. When the loan comes due, heirs can keep the home by repaying the balance or 95% of appraised value, whichever is less — or walk away and let the sale settle it, with any leftover equity going to the estate and any shortfall eaten by FHA insurance, never by your kids. And before any of this can happen, HUD requires a session with a HUD-approved counselor — it's mandatory, it costs around $125–$200, and it's where you'll get the real numbers this page can only approximate.

Frequently asked questions

How much money can I get from a reverse mortgage?

Roughly 30%–60% of your home's value (up to the 2026 FHA limit of $1,249,125), depending on the youngest borrower's age and interest rates — older borrowers and lower rates mean more. Any existing mortgage is paid off from the proceeds first, and about $15,000 in upfront costs typically comes out too. HUD's official PLF tables set the exact figure.

Do I still own my home with a reverse mortgage?

Yes — title stays in your name, exactly as with a regular mortgage; the lender only holds a lien. You must keep paying property taxes and homeowners insurance and maintain the home. Failing those obligations, not the loan itself, is what can put a reverse mortgage borrower at risk of foreclosure.

What happens to a reverse mortgage when the borrower dies?

The loan comes due, and heirs choose: keep the home by paying the loan balance or 95% of the appraised value (whichever is less), sell it and keep any equity above the balance, or walk away. HECMs are non-recourse — if the home sells for less than the balance, FHA insurance covers the gap, never the heirs.

Do you make monthly payments on a reverse mortgage?

No — that's the defining feature. Interest and mortgage insurance accrue onto the loan balance instead of being paid monthly, so the balance grows over time while your equity shrinks. The whole thing is settled when the last borrower sells, permanently moves out, or dies.

Who qualifies for a HECM reverse mortgage?

The youngest borrower must be at least 62, the home must be your primary residence with substantial equity, and you must show you can keep up taxes and insurance. HUD also requires a counseling session with a HUD-approved counselor before you can apply — it's mandatory, and it's where you'll get exact numbers.

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