How much can I get from a reverse mortgage? Estimate your potential loan amount, net proceeds, and understand the costs of a HECM reverse mortgage.
Age = Borrower's age (62–95)
Rate = Current interest rate (%)
PLF = Principal Limit Factor (capped at 0.80)
This is the maximum amount you can borrow before costs.
Upfront costs include origination fee, mortgage insurance premium (MIP), appraisal, title, recording, and counseling fees.
r = Note rate + 1.25% (annual growth rate)
n = Months since origination
The unused portion of your line of credit grows over time.
The calculator uses simplified HECM (Home Equity Conversion Mortgage) rules. Older borrowers and higher interest rates generally result in a higher Principal Limit Factor (PLF), which means more money available. The maximum PLF is capped at 80% of the home value under standard FHA guidelines.
If you choose a Line of Credit, the unused portion of your reverse mortgage grows over time at a rate equal to the note rate plus 1.25%. Below is a 10-year projection.
| Year | Available Credit | Growth |
|---|---|---|
| Run a calculation with "Line of Credit" selected to see the projection. | ||
A reverse mortgage is a type of home loan available to homeowners aged 62 and older that allows you to convert part of your home equity into cash without having to sell your home or make monthly mortgage payments. The most common type is the Home Equity Conversion Mortgage (HECM), which is insured by the Federal Housing Administration (FHA).
Unlike a traditional mortgage where you make monthly payments to the lender, with a reverse mortgage the lender makes payments to you. The loan is repaid when you sell the home, move out permanently, or pass away. At that point, the loan balance (including accrued interest and fees) must be repaid, typically from the proceeds of selling the home.
One of the key advantages of a reverse mortgage is the flexibility in how you receive your money. Each option has distinct benefits depending on your financial needs and goals.
Receive all of your available funds at once when the loan closes. This option is best for large one-time expenses such as home renovations, medical bills, or paying off an existing mortgage. Note that a lump sum in the first year is capped at 60% of the principal limit for HECM loans.
Best for: Large immediate expenses or debt payoff.
Access funds as needed, and the unused portion grows over time at a rate equal to the note rate plus 1.25%. This is the most flexible option — you pay interest only on the amount you actually use. The line of credit continues to grow as long as you don't draw from it, making it an excellent financial safety net.
Best for: Financial safety net, emergency fund, or ongoing needs.
Receive a steady stream of income each month for a fixed period (term) or for as long as you live in the home (tenure). This can supplement retirement income, Social Security, or pension benefits. Monthly payments provide predictable cash flow and peace of mind.
Best for: Supplementing retirement income or covering ongoing expenses.
Reverse mortgages come with several upfront costs that are typically rolled into the loan balance rather than paid out-of-pocket. Understanding these costs helps you make an informed decision.
Educational Purposes Only: This reverse mortgage calculator is provided for educational and informational purposes only. Results are estimates based on simplified HECM formulas and the information you provide. They do not constitute financial advice, loan approval, or a commitment to lend. Actual reverse mortgage terms depend on many factors including your age, the age of any co-borrower, interest rates at closing, property type, property condition, and specific lender underwriting criteria. You are required by law to receive HUD-approved counseling before obtaining a reverse mortgage. Always consult with a qualified financial advisor and HUD-approved counselor before making financial decisions regarding a reverse mortgage.