Reverse Mortgage Calculator
Estimate how much you can access from your home equity through a HECM reverse mortgage.
Your Home & Loan Details
Reverse Mortgage Estimate
| Home value | $400,000 |
| HECM limit (2026) | $400,000 |
| Principal limit factor | 46.0% |
| Gross principal limit | $184,000 |
| Total fees | $17,500 |
| Existing mortgage payoff | $50,000 |
| Net proceeds available | $116,500 |
| Remaining equity (today) | $216,000 |
Available Proceeds by Age
| Age | PL Factor | Gross Proceeds |
|---|---|---|
| 62 | 39.4% | $157,600 |
| 65 | 41.6% | $166,400 |
| 70 (you) | 46.0% | $184,000 |
| 75 | 51.4% | $205,600 |
| 80 | 58.3% | $233,200 |
| 85 | 66.6% | $266,400 |
| 90 | 76.2% | $304,800 |
Important Considerations
- 1.Your existing mortgage of $50,000 will be paid off first from proceeds
- 2.You never owe more than your home's value — HECM is a non-recourse loan
- 3.Required: HUD-approved counseling session before applying (fee ~$125)
- 4.You must continue paying property taxes, insurance, and maintaining the home
Based on 2026 HECM guidelines. Actual proceeds vary by lender, location, and current rates. HUD counseling is required before applying.
How Reverse Mortgages Work
A reverse mortgage (HECM — Home Equity Conversion Mortgage) lets homeowners age 62+ convert home equity into cash without selling or making monthly payments. Instead of you paying the bank, the bank pays you. The loan balance grows over time as interest accrues, and it's repaid when you sell the home, move out permanently, or pass away. The key protection: you can never owe more than your home's value (non-recourse), and you retain homeownership.
HECM Payout Options Compared
| Option | How It Works | Best For |
|---|---|---|
| Lump sum | One-time cash payment at closing | Paying off existing mortgage, large expense |
| Tenure | Equal monthly payments for life | Supplementing retirement income |
| Term | Equal payments for a fixed number of years | Higher monthly income for a set period |
| Line of credit | Draw as needed; unused amount grows | Flexibility, emergency fund, tax planning |
| Combination | Mix of lump sum + line of credit or monthly | Paying off mortgage + keeping reserves |
Reverse Mortgage Costs
| Fee | Amount | Notes |
|---|---|---|
| Upfront MIP | 2% of home value (or HECM limit) | Financed into loan balance |
| Annual MIP | 0.50% of outstanding balance | Accrues monthly, added to balance |
| Origination fee | $2,500–$6,000 | 2% of first $200K + 1% over $200K, max $6K |
| Appraisal | $400–$600 | Required, paid upfront |
| Closing costs | $2,000–$5,000 | Title insurance, recording fees, etc. |
| Counseling | ~$125 | HUD-approved counselor, required |
Frequently Asked Questions
Can I lose my home with a reverse mortgage?
You can't be forced to sell solely because the loan balance exceeds the home value. However, you must maintain the home, pay property taxes and insurance, and live in the home as your primary residence. Failure to meet these requirements can trigger foreclosure — the most common reason reverse mortgages go wrong. As long as you meet these obligations, you can stay in the home for life.
What happens to heirs when the borrower dies?
Heirs have 30 days (extendable to 12 months) to repay the loan or sell the home. If the home is worth more than the loan balance, heirs keep the difference. If the home is worth less, heirs owe nothing beyond the home's value — the FHA insurance covers the shortfall. Heirs can also choose to purchase the home for 95% of appraised value.
Is the line of credit growth feature real?
Yes, and it's one of the most powerful features. Your unused credit line grows at the current interest rate plus the 1.25% MIP rate — regardless of whether your home's value increases or decreases. This makes opening a reverse mortgage line of credit early (closer to age 62) strategically valuable, even if you don't need the money immediately.
See also: Home Equity Calculator and Retirement Income Calculator.