HECM Reverse Mortgage Calculator

A HECM is insured by the FHA, which caps how much you can borrow relative to your home's value using a nationally published lending limit and age-based Principal Limit Factor tables, and requires mandatory third-party counseling before you can apply. A proprietary reverse mortgage (sometimes called a "jumbo" reverse mortgage) is a private product, not FHA-insured, typically aimed at homes worth more than the HECM lending limit allows — see our jumbo reverse mortgage calculator if that describes your situation. This calculator applies HECM rules only: HUD's principal limit factor table, the FHA lending limit and FHA's premiums. Proprietary lenders do not publish their factors, so for a home worth more than the limit it counts value only up to the limit and tells you that the amount above it is ignored. The eligibility rules and insurance premium structure below are likewise specific to the federally-insured HECM program.

The distinction matters beyond terminology: because a HECM is FHA-insured, it comes with the mandatory counseling session, the financial assessment, and the annual MIP described below — steps and costs a proprietary product may structure differently since it isn't bound by the same federal program rules. If a lender describes a reverse mortgage offer without mentioning FHA insurance or a HUD case number, confirm directly which category it falls into before assuming HECM protections apply.

• Age. The youngest borrower (or eligible non-borrowing spouse) on the loan must be 62 or older.
• Primary residence. The home must be your principal residence — you must live in it the majority of the year.
• Sufficient equity. You must own the home outright or have a low enough existing mortgage balance that the HECM proceeds can pay it off at closing.
• Financial assessment. Lenders are required to assess your income, credit history, and ability to keep up with property taxes, homeowners insurance, and maintenance going forward — a rule put in place after early HECM defaults tied to unpaid taxes and insurance.
• Property eligibility. Single-family homes, 2-4 unit properties (if owner-occupied), HUD-approved condos, and certain manufactured homes typically qualify; most co-ops do not.

Every HECM carries FHA mortgage insurance, charged in two parts under current program rules: an upfront MIP of 2% of the maximum claim amount, paid (or financed into the loan) at closing, and an ongoing annual MIP of 0.5% of the outstanding balance, which compounds into your balance every month (HUD Mortgagee Letter 2017-12). The calculator above applies both: the upfront premium as part of your closing costs, and the 0.5% annual premium in its balance projection. That insurance is what funds the non-recourse guarantee: it's the reason you or your heirs will never owe more than the home is worth when the loan comes due, no matter how large the amortized balance has grown.

The upfront premium is a one-time cost baked into your closing costs; the ongoing premium is the one that matters for long-term projections, since it compounds for as long as the loan is outstanding.

HUD publishes official Principal Limit Factor (PLF) tables that determine how much of your home's value you can actually access through a HECM, based on two inputs: the age of the youngest borrower and the expected interest rate at closing. As a general rule, older borrowers and lower expected rates both produce a higher principal limit — meaning more available funds relative to the same home value. Your available amount is calculated against the lesser of your home's appraised value or the FHA's national HECM lending limit for the year you apply, not the full appraised value if it exceeds that limit.

The calculator above uses HUD's published PLF table (available on HUD's HECM page) directly. Enter the youngest borrower's age and your expected rate and it reads the factor from the table, rounding the rate down to the nearest 1/8-point row so it never overstates the factor. It multiplies that factor by the maximum claim amount (the lesser of your home's value and the 2026 limit of $1,249,125) to get the principal limit, then subtracts the upfront MIP, origination fee, your other closing costs and any mortgage payoff. Your lender's figure can still differ if its appraisal, expected rate or fees differ from what you entered.

Two of the biggest levers in how much a HECM actually makes available are ones you can't negotiate: your age and the expected interest rate at closing. HUD's Principal Limit Factor tables are built around actuarial life-expectancy assumptions — the older the youngest borrower is, the shorter the loan is statistically expected to remain outstanding, so a larger share of the home's value can be made available upfront. A 62-year-old borrower and an 85-year-old borrower on the identical home value and rate will see meaningfully different principal limits, with the older borrower typically qualifying for a noticeably higher percentage.

Interest rate works in the opposite direction: a lower expected rate generally increases your principal limit, because a lower rate means the balance is projected to compound more slowly, leaving more room before it could approach the home's value over the loan's expected life. This is why locking in favorable rate conditions can matter just as much as your age when it comes to how much a HECM actually makes available — a detail that's easy to miss if you only compare loans by their stated interest rate rather than the resulting principal limit.

To make the age effect concrete rather than abstract, consider two neighbors with identical $400,000 homes and the same quoted rate, applying for a HECM in the same month. Assume an expected rate of 6.5% for both, no existing mortgage, and $3,000 of other closing costs. In HUD's PLF table, the 65-year-old's factor is 0.355, a principal limit of $142,000; the 82-year-old's factor is 0.491, a principal limit of $196,400. Both pay the same costs: $8,000 upfront MIP (2% of $400,000), a $6,000 origination fee (the federal maximum on a $400,000 claim amount) and the $3,000 estimate, $17,000 in all. That leaves $125,000 available to the younger neighbor and $179,400 to the older one, from the same house. The calculator above produces these figures from those inputs, and then shows what happens next: it projects how each neighbor's balance compounds forward at the expected rate plus the 0.5% annual MIP, so you can compare not just what you might qualify for, but what it will cost against your equity 10 or 15 years later.

This is a useful gut-check before ever speaking to a lender: if a quoted principal limit looks unusually high or low compared to what you'd expect from the age-and-rate relationship described above, it's worth asking the loan officer directly which PLF table and effective rate they used, rather than assuming the first number you're given is the only one available.

Before you can even submit a HECM application, federal rules require you to complete an independent counseling session with a HUD-approved reverse mortgage counselor — a consumer protection unique to this loan type among mortgage products. The session covers your other options besides a reverse mortgage, how the growing-balance mechanic works, the costs involved, and the long-term effect on your estate. Lenders cannot waive this requirement, and counseling agencies are independent of any lender, specifically so the session isn't a sales conversation.

Because the note rate and the 0.5% annual MIP compound together every month, small rate differences separate widely over a HECM’s life. The table below runs an identical $200,000 opening balance forward at three effective accrual rates — all figures computed with the monthly compounding formula described above, no payments assumed.

The spread is the point: a two-point difference in effective rate costs $183,691 in additional accrued balance by year 15 on the same opening draw — which is why the rate you are quoted matters as much on a reverse mortgage as on a forward one, even though you never write a monthly check.

This calculator's principal limit comes from HUD's PLF table and the 2026 lending limit (both on HUD's HECM page); the 2% upfront and 0.5% annual MIP come from HUD Mortgagee Letter 2017-12; the origination fee cap, first-year draw limit and tenure-payment rules come from 24 CFR part 206 and HUD's HECM model loan agreement. Its balance projection compounds interest and the 0.5% annual MIP against the outstanding balance every month, and assumes the rate stays where you set it. For the authoritative program rules on eligibility, mortgage insurance premium structure, and the counseling requirement, see HUD's official HECM program page and the National Reverse Mortgage Lenders Association. For the general balance-growth mechanics this page builds on, see our reverse mortgage amortization calculator.