Reverse Mortgage Calculator

A reverse mortgage (HECM) lets homeowners age 62+ convert home equity into cash without monthly payments. The lender pays you (lump sum, line of credit, or monthly tenure), interest accrues on the balance, and the loan is repaid when you sell, move out permanently, or pass away. The home must remain your primary residence and you must keep paying taxes, insurance, and maintenance.

The HECM Principal Limit depends on age of youngest borrower, current interest rate, and home value (up to the 2026 HECM limit of $1,209,750). As a rough guide: age 62 ≈ 42% of value; age 70 ≈ 53%; age 80 ≈ 64%; age 85 ≈ 70%. Existing mortgage must be paid off at closing from the proceeds.

Reverse mortgages have high upfront costs: 2% upfront FHA mortgage insurance premium, an annual 0.5% MIP, origination fees (capped at $6,000), plus closing costs. On a $400,000 home, expect $10,000–$15,000 in fees. These are typically financed into the loan balance, so they compound at the loan rate over time.

The loan balance grows monthly as interest and MIP accrue, so the amount owed at death or move-out can be substantially higher than the original draw - sometimes consuming all home equity. If you fail to pay property taxes, insurance, or maintain the home, the loan can be called due. Heirs must repay the balance (or 95% of appraised value, whichever is less) within 6 months to keep the home.