🏡 Reverse Mortgage Calculator

A reverse mortgage (HECM) is a loan for homeowners aged 62+ that allows you to convert part of your home equity into cash without selling your home or making monthly mortgage payments. The loan is repaid when you permanently leave the home, sell it, or pass away. The amount you can borrow depends on your age, home value, current interest rates, and loan type.

To qualify: (1) You must be at least 62 years old, (2) Own your home outright or have a low mortgage balance payable from proceeds, (3) Live in the home as your primary residence, (4) Not be delinquent on any federal debt, (5) Have resources to pay ongoing taxes, insurance, and maintenance, and (6) Complete HUD-approved counseling.

Five main options: (1) Lump Sum — all proceeds at once (fixed-rate only), (2) Tenure — equal monthly payments for life in the home, (3) Term — equal monthly payments for a fixed period, (4) Line of Credit — draw as needed, unused portion grows, (5) Combination — mix of monthly payments and line of credit. Most borrowers choose the line of credit for its flexibility and growth feature.

The amount depends on: (1) Your age — older borrowers access more equity, (2) Home value and FHA lending limits (up to $1,149,825 in 2026), (3) Current interest rates — lower rates allow higher borrowing, (4) Upfront costs including 2% MIP and closing costs. Typically, age 62 borrowers access 50–55% of home value, while age 80+ can access 65–75%.

Costs include: (1) Origination fee — up to $6,000 or 2% of first $200k plus 1% above, (2) Upfront MIP — 2% of home value, (3) Annual MIP — 0.5% of outstanding balance, (4) Closing costs — appraisal, title insurance, recording fees, (5) Servicing fees — up to $35/month. All costs can be financed into the loan.

Yes! You retain title and ownership. You remain responsible for property taxes, homeowners insurance, HOA fees, and maintenance. You can live in your home as long as you meet these obligations. The loan becomes due when you permanently move out, sell the home, or pass away.

The unused portion of your line of credit grows at the same rate as the loan's interest rate plus 0.5% annual MIP. With a 6.5% interest rate, your unused LOC grows at 7% annually. A $200,000 LOC could grow to approximately $387,000 in 20 years — guaranteed regardless of home value changes.

Reverse Mortgage Advantages: No monthly payments, can't be canceled by lender, LOC grows over time, FHA-insured. HELOC Advantages: Lower costs, available to younger borrowers, potentially lower rates. A reverse mortgage suits homeowners 62+ with limited retirement income who want to eliminate payments and stay long-term.