Reverse Mortgage Calculator
Estimate the funds a homeowner aged 62 or older could access through a reverse mortgage (HECM).
About the Reverse Mortgage Calculator
A Home Equity Conversion Mortgage lets homeowners 62+ borrow against their home without monthly payments. The amount depends on the youngest borrower's age, interest rates and the home value up to the FHA limit. You must keep paying property taxes, insurance and upkeep.
The formula
Available ≈ min(value, FHA limit) × principal limit factor − costs − existing mortgage
Worked example
Example: Estimated funds available = $167,000
- Inputs: Youngest borrower's age: 77 years; Home value: $440,000; Existing mortgage: $55,000; Principal limit factor: 55%; Upfront costs (MIP, origination, closing): $20,000.
- Formula: Available ≈ min(value, FHA limit) × principal limit factor − costs − existing mortgage
- Result: Estimated funds available = $167,000
- Principal limit: $242,000
- Initial MIP (2% of claim amount): $8,800
Things to keep in mind
- An estimate only; HUD requires counselling before you apply, and the lender sets the exact principal limit.
Questions people ask
Can I lose my home?
Yes, if you don't pay taxes, insurance or maintain the home.
What do heirs owe?
Never more than the home's value (it's a non-recourse loan).