RetirementCalculator.net

Reverse Mortgage Calculator

Estimate how much you could receive from a HECM reverse mortgage: as a lump sum, a growing line of credit, or monthly payments for life.

Updated October 2026

70
6295

HECM proceeds are based on the youngest borrower or eligible spouse

$

Your best estimate of appraised value. FHA counts up to $1,249,125 (2026 limit)

$

Any mortgage or lien must be paid off at closing, usually from the loan itself

6.5%
3%8%

10-year index plus the lender's margin. Lower rates mean higher proceeds

$

Appraisal, title, and counseling fees. Typically $2,500 to $4,000

3%
0%6%

Used only for the equity chart, not for loan proceeds

Built-in HECM rules: 2% upfront mortgage insurance, 0.5% annual mortgage insurance, capped origination fee, and the first-year withdrawal limit are all applied automatically.

Estimated available proceeds

$0

Principal Limit

$0

Mortgage Payoff

$0

paid from loan at closing

Upfront Costs

$0

First-Year Access

$0

HUD limits year-one draws

Three ways to take it

Lump sum at closing

$0

Line of credit

$0

Unused credit grows: about $0 in 5 years, $0 in 10 years

Tenure (monthly payment)

$0/mo

Good to know: A HECM is non-recourse. You (or your heirs) never owe more than the home is worth when the loan is repaid, even if the balance outgrows the home's value.

Home Value vs Loan Balance Over Time

Projected values are estimates and are not guaranteed. Actual results will vary.

By Ryan England Last Updated:

How it works

How this reverse mortgage calculator works

Principal limit estimate

Your borrowing power starts with HUD's principal limit factor tables: a percentage of your home's value based on the youngest borrower's age and the expected interest rate. This calculator interpolates from the current HUD table (in effect since October 2017), so treat results as a close estimate rather than a lender quote.

Full HECM cost model

The calculator applies the FHA's 2% upfront mortgage insurance premium, the capped origination fee formula, and your closing cost estimate, then subtracts any existing mortgage payoff. What remains is the net amount actually available to you.

Three payout options

See your proceeds as a lump sum (with HUD's first-year withdrawal limit applied), a line of credit whose unused balance grows each year, or tenure payments that continue monthly for as long as you live in the home.

Equity projection

The chart projects your loan balance against your home's value year by year, so you can see how much equity would remain for you or your heirs under the fastest-spending scenario: a full draw at closing.

Key numbers

HECM rules at a glance (2026)

2026 Lending Limit

$1,249,125

max claim amount

Minimum Age

62

youngest borrower

Upfront MIP

2%

of max claim amount

Annual MIP

0.5%

of loan balance

Sources: HUD Mortgagee Letter 2025-22 (2026 HECM maximum claim amount) and the Consumer Financial Protection Bureau reverse mortgage resources.

Strategies

How retirees actually use reverse mortgages

The standby line of credit

Opening a HECM line of credit early and leaving it untouched lets the unused credit grow every year, regardless of what your home is worth later. Retirees use it as a buffer: drawing from the line in down-market years instead of selling investments at a loss.

Eliminating a mortgage payment

The most common use: paying off an existing mortgage with HECM proceeds. The required monthly payment disappears, freeing up cash flow, though interest keeps accruing on the balance. Run your own numbers above to see whether enough is left over after the payoff.

When it's the wrong tool

If you plan to move within a few years, the upfront costs rarely pay off. If leaving the home to heirs debt-free is a priority, or you cannot reliably cover property taxes and insurance, a reverse mortgage can put the home at risk. Downsizing or a home equity loan may serve you better.

Tips

Before you talk to a lender

Counseling comes first, by law

Every HECM borrower must complete a session with an independent, HUD-approved housing counselor before applying. Sessions typically cost around $125 to $200 and cover alternatives, costs, and obligations. Treat it as a feature, not a hurdle: it is a low-pressure place to ask questions.

Your ongoing obligations

A reverse mortgage requires no monthly loan payment, but you must keep paying property taxes, homeowners insurance, HOA dues, and maintenance. Falling behind on these is the main way borrowers end up in default and facing foreclosure.

Talk to your heirs now

The loan comes due when the last borrower leaves the home, and heirs generally have limited time to sell, refinance, or settle at 95% of appraised value. Families that discuss the plan in advance avoid the scramble; surprises are where reverse mortgages get their bad reputation.

Compare more than one quote

Lender margins vary, and the margin drives both your expected rate (which sets your proceeds) and how fast your balance grows. Origination fees are also negotiable. For homes worth more than the FHA limit, ask about proprietary reverse mortgages, but compare their terms carefully against a HECM.

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Common questions

How much money can I get from a reverse mortgage?
It depends on the age of the youngest borrower, your home's value (up to the 2026 FHA limit of $1,249,125), and the expected interest rate. HUD's principal limit factors typically allow a 62-year-old to borrow around 31% to 41% of home value at today's rates, rising to 47% or more by age 82. A 70-year-old with a $400,000 home and no mortgage might access roughly $135,000 after upfront costs. Older borrowers and lower rates both increase proceeds.
What are the requirements for a reverse mortgage?
For a HECM, the FHA-insured version: the youngest borrower must be 62 or older, the home must be your primary residence, and you need substantial equity (usually 50% or more). You must complete a counseling session with a HUD-approved counselor, pass a financial assessment showing you can keep paying property taxes and homeowners insurance, and the property must meet FHA standards.
How is reverse mortgage money paid out?
You can choose a lump sum at closing, a line of credit you draw on as needed, monthly payments for as long as you live in the home (tenure), monthly payments for a set number of years (term), or a combination. HUD limits first-year withdrawals to 60% of your principal limit, or your mandatory obligations plus 10%, whichever is greater. The unused portion of a line of credit grows over time, which is why many planners favor that option.
Do I have to repay a reverse mortgage?
Yes, but not with monthly payments. The loan comes due when the last borrower dies, sells the home, or moves out for more than 12 months. The balance grows over time as interest and mortgage insurance accrue. HECMs are non-recourse: you or your heirs never owe more than the home's value at repayment. Heirs who want to keep the home can settle the loan for the balance or 95% of the appraised value, whichever is less.
What does a reverse mortgage cost?
Expect an upfront FHA mortgage insurance premium of 2% of your home's value (capped at the lending limit), an origination fee between $2,500 and $6,000, and roughly $2,500 to $4,000 in standard closing costs. Ongoing costs include 0.5% annual mortgage insurance plus interest on the balance. Most borrowers finance these costs into the loan, which reduces the cash available to them.
Is money from a reverse mortgage taxable?
No. Reverse mortgage proceeds are loan advances, not income, so they are not subject to income tax and do not affect Social Security or Medicare benefits. They can affect needs-tested programs such as Medicaid or Supplemental Security Income if proceeds accumulate in your bank account past certain limits. Interest is generally not deductible until the loan is actually repaid.
What happens to my spouse if I die first?
If your spouse is a co-borrower, nothing changes: the loan continues on the same terms. If your spouse is younger than 62 or was not on the loan, HUD rules let an eligible non-borrowing spouse stay in the home after your death, provided the property charges stay current, but they cannot draw any remaining loan funds. Naming both spouses as borrowers whenever possible is usually the safer structure.