Reverse Mortgage Calculator
Our reverse mortgage calculator helps you estimate how much you could receive from a Home Equity Conversion Mortgage (HECM) and projects how your loan balance and home equity may change over time. Adjust the values to understand how different factors affect your reverse mortgage potential.
Reverse Mortgage Calculator
Enter your information and click "Calculate" to see your estimated reverse mortgage amount.
Understanding Reverse Mortgages
What is a Reverse Mortgage?
A reverse mortgage allows homeowners 62 and older to convert part of their home equity into cash without selling the home or making monthly mortgage payments.
Loan Growth Over Time
Unlike traditional mortgages, reverse mortgage balances increase over time as interest accrues on the loan and is added to the principal balance.
Repayment
The loan must be repaid when the last borrower sells the home, moves out, or passes away. Most often, the home is sold to repay the loan.
What is a Reverse Mortgage?
A reverse mortgage is a loan available to homeowners 62 years or older that allows them to convert part of their home equity into cash without selling their home or making monthly mortgage payments. The most common type is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA).
How to Use This Calculator
Our reverse mortgage calculator is designed to give you a clear picture of your potential reverse mortgage benefits. Here's how to use it:
- Home Value: Enter the current estimated value of your home.
- Borrower Age: Enter the age of the youngest borrower (must be at least 62).
- Loan Type: Choose between fixed-rate or variable-rate (HECM) options.
- Interest Rate: Enter the expected interest rate for your reverse mortgage.
- Margin Rate: For variable rate loans, enter the margin above the index rate.
- Loan Costs: Enter estimated closing costs and loan origination fees.
- Home Appreciation Rate: Enter your estimated annual home value growth rate.
After entering these values, the calculator will show your estimated available funds and provide a 30-year projection of your loan balance, home value, and remaining equity.
Factors That Affect Your Reverse Mortgage
Borrower Age
The older you are, the higher the percentage of your home's value you can borrow. This is because the lender expects the loan to be repaid sooner.
Home Value
Higher valued homes can yield more funds, although there are FHA-established limits on the maximum claim amount ($1,089,300 in 2025).
Interest Rate
Lower interest rates mean you can borrow more initially and your loan balance will grow more slowly over time, preserving more equity.
Loan Costs
Origination fees, mortgage insurance premiums, and closing costs reduce your available funds, as they're typically financed as part of the loan.
Advantages and Considerations
Potential Benefits
- No monthly mortgage payments required
- Funds can be used for any purpose
- You retain ownership of your home
- Non-recourse loan (you'll never owe more than your home's value)
- Can help increase retirement income
- Multiple payout options (lump sum, line of credit, monthly payments)
Important Considerations
- Loan balance increases over time as interest accrues
- Reduces the equity in your home
- You must maintain the home and pay property taxes and insurance
- May affect eligibility for some means-tested benefits
- Typically has higher fees than traditional mortgages
- Loan becomes due when you sell, move out, or pass away
Required Counseling
Before obtaining a reverse mortgage, the FHA requires that you speak with a HUD-approved counselor who will explain the costs, payment options, tax implications, and alternatives. This counseling is designed to ensure you fully understand how a reverse mortgage works.
Payment Options
Lump Sum
Receive all available funds at once when your loan closes. This option is typically only available with fixed-rate loans.
Line of Credit
Withdraw funds as needed, up to your available limit. The unused portion grows over time, giving you access to more funds in the future.
Term Payments
Receive equal monthly payments for a fixed period that you select.
Tenure Payments
Receive equal monthly payments for as long as at least one borrower lives in the home as their primary residence.
Modified Term/Tenure
Combination of a line of credit with either term or tenure monthly payments.
Alternatives to Consider
Before deciding on a reverse mortgage, consider these alternatives that might better suit your needs:
- Home Equity Loan or HELOC: If you can make monthly payments, these options typically have lower costs.
- Refinancing: Reducing your current mortgage payment might free up needed cash.
- Downsizing: Selling your home and moving to a less expensive one could provide funds without ongoing costs.
- Property Tax Deferral Programs: Many states offer programs that allow seniors to defer property taxes.
- Family Financing: Arrangements with family members might provide needed funds at lower costs.
Frequently Asked Questions
Do I have to make any payments on a reverse mortgage?
No monthly mortgage payments are required. However, you must maintain the home and continue to pay property taxes, homeowners insurance, and any HOA fees.
Will a reverse mortgage affect my Social Security or Medicare benefits?
Generally, reverse mortgage proceeds don't affect Social Security or Medicare benefits. However, needs-based benefits like Medicaid or Supplemental Security Income (SSI) could be affected if you keep monthly proceeds in your bank account.
Can my heirs still inherit my home?
Yes. When the loan becomes due, your heirs have several options: they can pay off the loan and keep the home, sell the home to pay off the loan (keeping any remaining equity), or turn the home over to the lender if the loan balance exceeds the home's value.
What happens if my home decreases in value?
Reverse mortgages are non-recourse loans, meaning you or your heirs will never owe more than the home is worth when the loan becomes due, even if the loan balance exceeds the home's value.
Can I lose my home with a reverse mortgage?
Yes, if you fail to meet the loan requirements such as keeping up with property taxes, homeowners insurance, home maintenance, or if you no longer use the home as your primary residence for more than 12 months.
Get Expert Advice
While our calculator provides estimates, we recommend consulting with a HUD-approved reverse mortgage counselor and a financial advisor to determine if a reverse mortgage is right for your situation.
For more information about reverse mortgages, explore our comprehensive guide that covers eligibility requirements, costs, payment options, and answers to frequently asked questions.