Reverse Mortgage Calculator
Estimate how much cash you can access through an HECM reverse mortgage based on age, home value, and current rates. For homeowners 62 and older.
⚠️ This is an estimate. Actual amounts depend on HUD loan limits, current interest rates, your specific situation, and HECM counseling outcomes. Always consult a HUD-approved HECM counselor before applying.
Reviewed & updated for 2026 by Rakesh Choudhary, PhDMethodology & sources · How we calculate
How much can you borrow by age?
| Age | % of home value | On $400K home | On $700K home |
|---|---|---|---|
| 62 | 29.1% | $116,400 | $203,700 |
| 65 | 31.3% | $125,200 | $219,100 |
| 70 | 35.0% | $140,000 | $245,000 |
| 75 | 37.9% | $151,600 | $265,300 |
| 80 | 42.7% | $170,800 | $298,900 |
| 85 | 49.3% | $197,200 | $345,100 |
HUD's principal limit factors at a 7.5% expected rate, for the youngest borrower's age: the most you can borrow, before the upfront insurance, fees and any existing mortgage come out of it. Higher rates reduce these amounts; only the first $1,249,125 of a home's value counts in 2026.
How reverse mortgage interest grows over time
Unlike a forward mortgage where the balance shrinks each month, a reverse mortgage balance grows every month. Interest accrues on both the principal you've drawn and on the prior interest — compound growth in reverse. This is the single most misunderstood aspect of a HECM.
A $100,000 draw at a 7.5% rate, with the 0.5% annual mortgage insurance, both added monthly, grows to approximately:
| Year | Loan balance | % of original draw |
|---|---|---|
| Year 1 | $108,300 | 108% |
| Year 5 | $148,985 | 149% |
| Year 10 | $221,964 | 222% |
| Year 15 | $330,692 | 331% |
| Year 20 | $492,680 | 493% |
By year 20, the balance is about 4.9 times the draw. If the home appreciates at 3% per year, a $500,000 home becomes about $903,056, leaving about $410,375 after the loan is repaid; a larger draw, or later draws, leave much less. This is by design: the HECM program is built so the lender can recover principal plus accrued interest from the eventual sale, while the homeowner enjoys cash flow today.
Choosing between the four payout options
HECM borrowers must pick how to receive the money. The choice has substantial financial consequences, so it's worth understanding each:
- Lump sum. Only with a fixed-rate HECM, taken at closing, and no more than 60% of the principal limit (or your mandatory obligations plus 10% of it). Best for borrowers who need a large sum (paying off existing mortgage, covering medical bills). Worst for cash flow planning because interest accrues on the full amount from day one.
- Tenure. Equal monthly payments for as long as you live in the home. Best as a Social Security supplement for healthy borrowers who plan to age in place. Provides predictability but can't be increased later.
- Term. Equal monthly payments for a fixed number of years (usually 5-25). Higher monthly amounts than tenure but stops at the end of the term. Useful for bridging to a specific retirement milestone like Social Security at 70.
- Line of credit. Borrow as needed, when needed. Unused credit grows at the loan's interest rate plus the 0.5% annual mortgage insurance rate (adjustable-rate HECMs only) — a unique HECM feature that doesn't exist with regular HELOCs. Most financial planners recommend this option because it maximizes flexibility and the growing credit line effectively hedges against future interest rate increases.
You can also combine options — for instance, take a small lump sum to pay off an existing mortgage and put the rest in a line of credit. With an adjustable-rate HECM you can change payment options later; a fixed-rate HECM can't change.
Reverse mortgage risks the brochure doesn't emphasize
HECMs are heavily regulated and broadly safer than they were in the 2000s, but they still carry real risks that borrowers and adult children should know about before signing:
- Property tax and insurance default. If you stop paying these, the loan can be called due (with HUD's approval) and, unless the default is cured, the home foreclosed. This is the single most common reverse mortgage default and frequently catches widowed spouses by surprise.
- Long-term care relocation. If you leave the home for more than 12 consecutive months (typically because of assisted living or nursing care), the loan becomes due. The home must be sold to repay the balance, often during a time of family stress.
- Non-borrowing spouse problems. If only one spouse is on the HECM (usually because the other is under 62 at origination), the non-borrowing spouse can stay in the home after the borrower's death but cannot draw additional loan proceeds. This has caused major hardship for surviving spouses.
- Heirs face tight timelines. When the borrower dies, heirs have 30 days to decide what to do and about 6 months, which HUD can extend, to sell, refinance, or pay off. Probate delays can complicate this.
- Closing costs are high. The upfront mortgage insurance is 2% of the home's value (up to the HECM limit), not of the loan, and the origination fee can reach $6,000: on a $500,000 home those two alone are $16,000, before appraisal, title and recording costs. They are paid from the loan, so they reduce the cash available immediately.
HUD requires every applicant to complete counseling with an approved HECM counselor before applying. The session takes 60-90 minutes, costs $125-$200, and walks through these risks in detail. Adult children should attend the session with the borrower whenever possible.
FAQs
What is a reverse mortgage?
A reverse mortgage lets homeowners 62+ borrow against home equity without monthly mortgage payments. The loan balance grows over time and is repaid when you sell, move out, or pass away. The home itself is the collateral, and you keep the title and live there. The federally insured kind, and by far the most common, is the FHA's HECM (Home Equity Conversion Mortgage).
How much can I get from a reverse mortgage?
Depends on three factors: (1) Borrower's age (older = more), (2) Home value (more value = more loan), (3) Current interest rates (lower rates = more loan). At a 5% to 7.5% expected rate, HUD's factors let you borrow about 31.3% to 43.0% of the home's value at 65, and 37.9% to 49.2% at 75, before costs. Only the first $1,249,125 of the home's value counts in 2026 (HUD's maximum claim amount).
Do I have to pay back a reverse mortgage?
Not while you live in the home. The loan is repaid when: (1) You sell the home, (2) You move out permanently, or are away more than 12 months in a row because of illness, (3) You pass away (heirs have 30 days to respond and about 6 months, which HUD can extend, to sell, refinance or pay), (4) You fail to pay property tax, insurance, or maintain the home. The home secures the loan.
Will my children inherit anything?
Yes, but only the equity remaining after the reverse mortgage is paid off. If your home value at sale exceeds the loan balance + interest accrued, the difference goes to heirs. If the loan balance exceeds the home's value, heirs owe nothing extra (HECM is non-recourse), but they also inherit nothing from the home.
Is a reverse mortgage a good idea?
Sometimes. Good for: retirees with significant home equity, low cash flow, no plans to leave home, willing to give up legacy in home. Bad for: those who plan to move within 5 years, want to leave the home to heirs, can solve cash flow via HELOC or downsizing. Reverse mortgages have high upfront costs (a 2% insurance premium on the home's value plus an origination fee of up to $6,000) and accrue interest faster than people expect.
What's the difference between lump sum, monthly, and line of credit?
Four payout options. Lump sum: one draw at closing, offered only on a fixed-rate HECM, and capped in the first year at 60% of your borrowing limit (more if clearing an existing mortgage needs it). Tenure: monthly payments for as long as you live in the home. Term: monthly payments for fixed years. Line of credit: borrow as needed, like a HELOC, with growing unused credit limit (LOC option often best for flexibility).
What are reverse mortgage fees?
Upfront costs: a 2% mortgage insurance premium (MIP) on the home's value up to the HECM limit (not on the loan), a lender origination fee (the greater of $2,500 or 2% of the first $200,000 of value plus 1% above, capped at $6,000), counseling fee ($125-$200), appraisal ($500-$700), title fees ($1,000-$3,000). Ongoing: 0.5% annual MIP on loan balance + accrued interest.