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. The math this calculator runs (interest and MIP compounding against your balance) applies conceptually to both, but the specific eligibility rules and insurance premium structure below are unique 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 — exactly the ongoing rate you can model in the calculator above. 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.

Because PLF tables are published and updated by HUD directly, this calculator doesn't attempt to reproduce the exact federal lookup table — instead, use it to project how a given starting balance would amortize over time once your lender confirms your actual principal limit.

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. The 65-year-old neighbor will typically see a materially lower principal limit percentage than the 82-year-old neighbor — HUD's actual published Principal Limit Factor for a given age and rate combination determines the exact numbers, which is why this calculator doesn't try to guess a specific dollar figure for you. What it does show is what happens next: once each neighbor draws their respective amount, the calculator projects how that starting balance compounds forward at the rate and MIP you enter, so you can compare not just what you might qualify for, but what it will actually 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 (typically 60-90 minutes, in person or by phone) 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.

This calculator's balance projection compounds interest and your specified ongoing MIP rate against the outstanding balance every month, matching the mechanics HUD documents for HECM negative amortization. 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.