Reverse Mortgage Calculator
A reverse mortgage lets homeowners 62+ tap their equity without monthly payments. Estimate the proceeds you could access.
How the reverse mortgage calculator works
A reverse mortgage, formally a Home Equity Conversion Mortgage, lets a homeowner aged 62 or older convert part of their equity into cash without selling or making monthly payments. The lender advances funds; the loan balance grows over time as interest and fees accrue, and it is repaid when the borrower sells, moves out permanently, or passes away.
The amount available — the principal limit — rises with the borrower's age and the home's value, and shrinks as the expected interest rate climbs. This calculator estimates that principal limit so you can gauge realistic proceeds.
Worked example: with home value of $450,000, age of youngest borrower of 70 and expected interest rate of 6.75%, the reverse mortgage calculator shows estimated available proceeds of $207,450.
- Principal limit
- $207,450
- Existing mortgage
- $0
- Available to you
- $207,450
- Home equity
- $450,000
| Home value | Estimated available proceeds |
|---|---|
| $300,000 | $138,300 |
| $450,000 | $207,450 |
| $600,000 | $276,600 |
| $900,000 | $414,900 |
The formula
Available proceeds equal the home value (capped at the FHA lending limit) multiplied by a principal limit factor. That factor is set by the borrower's age and the expected rate: older borrowers and lower rates produce a larger factor. Upfront mortgage insurance, origination fees, and any existing mortgage payoff are then subtracted.
- The youngest borrower must be at least 62; the principal limit factor is keyed to that youngest age, not the oldest.
- Home value is capped at the current FHA HECM lending limit, so very high-value homes do not scale proceeds beyond that ceiling.
- Any existing mortgage must be paid off first from the proceeds, reducing the net cash available to you.
- Upfront and ongoing FHA mortgage insurance plus origination and servicing fees are deducted and are not trivial.
- The estimate is a snapshot; the actual loan balance compounds over time and erodes the equity left to heirs.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender or a licensed advisor.
Questions about the reverse mortgage calculator
Why do older applicants qualify for more money on the same house?
The principal limit factor is built around life expectancy. A lender advancing funds to an 80-year-old expects the loan to be repaid sooner than one made to a 62-year-old, so it can safely lend a larger share of the home's value.
Each year you age, the factor ticks up, which is why some homeowners wait before opening a HECM.
What happens to a reverse mortgage when the borrower dies?
The loan becomes due. Heirs typically have several months to repay the balance, usually by selling the home or refinancing it into their own name.
Because the HECM is non-recourse, they never owe more than the home is worth at sale, even if the balance has grown beyond the home's value. Any remaining equity after repayment belongs to the estate.
Do I still pay property taxes and insurance with a reverse mortgage?
Yes, and it matters. You remain the homeowner, so taxes, homeowners insurance, and upkeep stay your responsibility.
Falling behind on taxes or insurance is one of the few ways a reverse mortgage can be called due early, which can put the home at risk. Lenders verify your capacity to cover these costs during the application.
Is the Reverse Mortgage Calculator free to use?
Yes. Every calculator on MortgageLoansCalculator is completely free, with no sign-up, login or paywall. Run as many scenarios as you like.
How does a reverse mortgage work?
If you are 62 or older, it converts home equity into cash — a lump sum, credit line or monthly draw — with no required monthly repayment.
Interest is added to the balance, which grows over time and is repaid when you sell, move out, or pass away.
What are the downsides of a reverse mortgage?
The rising balance steadily reduces the equity left to your heirs, upfront costs and insurance are significant, and you must keep paying property taxes, insurance and upkeep or risk default. It is best weighed against downsizing or a HELOC.
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