Reverse Mortgage Calculator
A reverse mortgage lets homeowners 62+ tap their equity without monthly payments. Estimate the proceeds you could access.
A worked example
Running this tool on current national benchmarks (Federal Reserve / Freddie Mac via FRED (St. Louis Fed)) — swap in your own numbers to see how the result moves.
- Home value
- $450,000
- Age of youngest borrower
- 70
- Expected interest rate
- 6.50%
- Existing mortgage balance
- $0
- Years to project
- 15
- Home appreciation / year
- 3%
after paying off $0 owed
- Principal limit$209,700
- Existing mortgage$0
- Available to you$209,700
How the estimated available proceeds changes with home value
Holding the other inputs at the example above, here is how the result moves as home value changes.
| Home value | Estimated available proceeds | Principal limit |
|---|---|---|
| $300,000 | $139,800 | $139,800 |
| $450,000 | $209,700 | $209,700 |
| $600,000 | $279,600 | $279,600 |
| $900,000 | $419,400 | $419,400 |
The math behind it
The calculator estimates a principal limit — the share of your home value you can borrow — using a factor that rises with the age of the youngest borrower and falls as the expected interest rate rises. That factor is applied to your home value (capped at the HECM lending limit), and any existing mortgage is subtracted, since it must be paid off first. What remains is your estimated available proceeds. It then projects the loan balance growing with accrued interest against your home value drifting with appreciation, year by year.
Assumptions & limits
- The principal limit factor is an approximation based on age and rate; a real HECM uses HUD's official published factor tables.
- Home value is capped at the HECM maximum claim limit, so value above that does not increase proceeds.
- Any existing mortgage is deducted from the proceeds because a reverse mortgage must pay off prior liens first.
- The borrower makes no monthly payments; interest and insurance premiums accrue and are added to the balance over time.
- Only the youngest borrower's age is used, since eligibility and the factor are set by the youngest on title. This is an estimate — HUD-approved counseling is required for an actual HECM.
Reverse mortgage (HECM) basics
| Feature | Detail |
|---|---|
| Minimum age | 62 (youngest borrower) |
| Monthly payments | None required while you live in the home |
| Proceeds rise with | Older age and higher home value; fall as rates rise |
| Counseling | HUD-approved counseling required |
Source: Freddie Mac PMMS via FRED. Annual averages; latest weekly reading shown.
Common questions
Do I still owe money if the loan balance exceeds my home value?
No. A federally insured HECM is a non-recourse loan, so you or your heirs never owe more than the home is worth when it is sold to repay the loan. If the balance grows past the home value, the FHA insurance covers the shortfall — that is what the mortgage insurance premium pays for.
When does a reverse mortgage have to be repaid?
The loan comes due when the last borrower sells, permanently moves out, or passes away. At that point the home is typically sold to repay the balance, and any remaining equity goes to you or your heirs. Heirs can also repay the loan and keep the home.
Why do older borrowers get more money?
The principal limit is based on life expectancy: an older borrower has fewer years for interest to accrue, so the lender can advance a larger share of the home value. The calculator reflects this — proceeds rise with age and fall as the expected interest rate rises.