Reverse Mortgage Calculator
Estimate your 2026 HECM proceeds, upfront costs, and monthly or line-of-credit payout by age and home value.
A reverse mortgage (HECM) lets homeowners 62+ convert home equity into cash without monthly payments.This calculator estimates your Principal Limit using the 2026 FHA lending limit of $1,249,125, subtracts upfront MIP and closing costs, and projects your loan balance against your home's value under a lump sum, line of credit, tenure, or term payout.
How a Reverse Mortgage Is Calculated
HUD calculates your Principal Limit using the youngest borrower's age and the lender's expected interest rate — older age and lower expected rates both increase the percentage of home value you can access. From that limit, mandatory upfront costs and any existing mortgage payoff are deducted before you receive net proceeds.
Example: a 72-year-old with a $450,000 home, a $50,000 existing mortgage, and a 6.75% expected rate has a Principal Limit Factor of roughly 47%, producing a Principal Limit near $211,500. After ~$18,700 in MIP and closing costs and the $50,000 mortgage payoff, roughly $142,800 is available as a lump sum, growing line of credit, or monthly payments.
2026 HECM Costs at a Glance
| Cost | Amount | Shoppable? |
|---|---|---|
| Initial MIP | 2% of claim amount | No — HUD-set |
| Annual MIP | 0.5% of balance/yr | No — HUD-set |
| Origination fee | Greater of $2,500 or 2%/1% tiers, capped $6,000 | Partially — capped by FHA |
| Lender margin / rate | Varies by lender | Yes — shop this |
| Closing costs | ~$2,000–$3,000 | Partially |
2026 FHA HECM lending limit: $1,249,125. Figures are estimates for education — actual quotes require a HUD-approved counseling session and lender-specific pricing.
💡 Pro Tip: The Line of Credit Grows Even If Home Values Don't
The unused portion of a HECM line of credit grows every month at your note rate plus the 0.5% annual MIP — regardless of what your home is worth. Opening a reverse mortgage line of credit in your early 60s and leaving it largely untouched can mean substantially more available credit a decade later, since growth compounds on the line itself, not on home appreciation. This makes the LOC option a popular standby-reserve strategy for retirees who don't need income immediately but want a cushion against sequence-of-returns risk. Also remember: the loan is non-recourse, so a growing balance never puts your heirs on the hook for more than the home is worth at repayment.
Reverse Mortgage (HECM) Calculator
Your Home & Household
Results
Loan Balance vs. Home Value Over Time
| Year | Loan Balance | Home Value | Remaining Equity |
|---|---|---|---|
| 5 | $96,886 | $521,673 | $424,787 |
| 10 | $139,066 | $604,762 | $465,697 |
| 15 | $199,608 | $701,085 | $501,477 |
| 20 | $286,508 | $812,750 | $526,242 |
| 30 | $590,272 | $1,092,268 | $501,996 |
Non-recourse protection: you (or your heirs) will never owe more than the home's value at repayment, even if the balance exceeds it — FHA insurance covers the shortfall.
Based on your results — what to do next:
See how this fits your retirement number
A $118,688 boost changes how much you need from savings. Run your full retirement plan.
Layer in Social Security timing
Combine your $118,688 in available reverse mortgage proceeds with an optimized Social Security claiming age for a fuller income picture.
Compare against a HELOC instead
A HELOC has no age minimum and no MIP, but requires monthly payments. See how it stacks up against this $118,688 reverse mortgage estimate.
Reverse Mortgage FAQ
Who qualifies for a HECM reverse mortgage?
All borrowers on the title must be 62 or older, the home must be the primary residence, and it must be a single-family home, HUD-approved condo, or 2–4 unit property with the borrower occupying one unit. Borrowers must own the home outright or have a low enough remaining mortgage balance to be paid off with reverse mortgage proceeds, and pass a financial assessment confirming they can keep up with taxes, insurance, and maintenance. HUD-approved counseling is mandatory before applying, regardless of lender.
Lump sum, line of credit, tenure, or term — which payout is best?
A lump sum (available only with fixed-rate HECMs) suits borrowers who need to pay off a large existing mortgage or make a one-time purchase. A line of credit suits those who want a growing reserve to draw from as needed. Tenure payments suit those who want guaranteed monthly income for as long as they live in the home. Term payments suit those who want higher monthly amounts for a defined stretch — for example, to bridge the years before claiming Social Security at 70. Many borrowers combine a smaller lump sum with a line of credit for flexibility.
How does a reverse mortgage affect my heirs?
Heirs are never personally liable for the loan. When the last borrower passes away, heirs typically have up to 6 months (extendable to 12) to repay the balance and keep the home, sell the home and keep the difference if it's worth more than the balance, or walk away if the balance exceeds the value — FHA insurance absorbs any gap for the lender. If preserving the home for heirs is a priority, that should factor heavily into deciding how much to draw and which payout option to select.
Reverse mortgage vs. HELOC vs. downsizing — how do I choose?
A HELOC (see our HELOC calculator) usually has lower upfront costs and works at any age, but requires monthly payments and can be frozen or reduced if home values fall. A reverse mortgage has higher upfront costs and MIP but no required monthly payments and non-recourse protection. Downsizing avoids new debt entirely and can free up equity outright, but comes with moving costs and lifestyle disruption. The right choice depends on how long you plan to stay, your monthly cash flow needs, and how much you value keeping the home in the family.