Reverse Mortgage Calculator

How Much You Can Borrow: the HUD Formula

The amount available is the principal limit: your home's value (capped at the FHA limit) multiplied by a principal limit factor. HUD publishes the factors in a table by age and expected interest rate, posted on its HECM lender page. The current table applies to FHA case numbers assigned on or after October 2, 2017, and the calculator above reads it directly. A sample of the factors:

Source: HUD principal limit factor table, general table for ages 62 to 99, read October 12, 2026. Older borrowers and lower expected rates get higher factors.

Worked example. A 70-year-old with a $500,000 home, a $50,000 mortgage still owed and an expected rate of 6.5% has a factor of 0.392, so the principal limit is $196,000. Closing costs take $19,000: $10,000 of upfront mortgage insurance (2% of $500,000), a $6,000 origination fee (the federal maximum at this value) and an assumed $3,000 of other costs. With the $50,000 payoff, that leaves $127,000. In the first year the total that can go out is capped at 60% of the principal limit ($117,600), so after the $69,000 payoff and costs, $48,600 can be drawn in year one. Alternatively, the $127,000 can become a tenure payment of about $840 a month for life, or about $1,466 a month for 10 years. Left untouched, the line of credit grows to about $255,000 after 10 years, at the 6.5% rate plus 0.5% mortgage insurance.

How a Reverse Mortgage Balance Actually Grows

Per the Consumer Financial Protection Bureau, "interest and fees are added to the loan balance each month and the balance grows" on a reverse mortgage — the exact opposite of the standard amortization this site otherwise covers. Every month, the projection above takes the current balance and adds interest at your rate plus the annual mortgage insurance premium (MIP), which is 0.5% of the balance under HUD Mortgagee Letter 2017-12. That becomes the new, larger balance the following month compounds against. There's no principal payment reducing it at any point, which is why the growth accelerates the longer the loan is outstanding — you're paying compound interest on compound interest.

Worked Example

Take a homeowner who draws $150,000 from a reverse mortgage against a $400,000 home, at a 6% rate plus 0.5% ongoing MIP (6.5% combined monthly compounding). After 5 years, the balance grows to $207,423. After 10 years, $286,828. After 15 years, $396,630, which is close to the home's current value. After 20 years, $548,467, which would exceed the home's original value, though because HECM loans are non-recourse, the borrower or their heirs would never owe more than whatever the home is actually worth when it's sold, not this projected balance.

Who Actually Qualifies

The most common reverse mortgage — the FHA-insured Home Equity Conversion Mortgage (HECM) — requires the borrower to be 62 or older, occupy the home as a primary residence, and either own it outright or have a small enough existing balance to pay off at closing using the reverse mortgage proceeds. Borrowers must also stay current on property taxes, homeowners insurance, and home maintenance for the life of the loan — falling behind on any of these can trigger the loan becoming due, per CFPB borrower responsibility guidance. HECM lending is also capped at the FHA's annual limit — for a home valued well above that cap, see our jumbo reverse mortgage calculator instead.

The Non-Recourse Protection

The single most important protection in a HECM reverse mortgage is that it's non-recourse: neither the borrower nor their heirs will ever owe more than the home is worth at the time it's sold, even if the calculator above projects a balance that exceeds the home's value. The mortgage insurance premiums in the calculation above are what fund this protection — it's an FHA insurance pool that covers the lender's shortfall if a home sells for less than the outstanding balance.

What Happens When the Loan Comes Due

A reverse mortgage becomes due when the last surviving borrower sells the home, moves out permanently, or passes away. At that point, heirs typically have three options: repay the balance and keep the home (often by refinancing into a conventional mortgage), sell the home and keep any proceeds above the payoff amount, or sign the home over to the lender with no personal liability for any shortfall, thanks to the non-recourse protection described above.

What a Reverse Mortgage Actually Costs

The rate and ongoing MIP you enter above aren't the only cost — HECM loans carry upfront fees that get added to your starting balance rather than paid out of pocket in most cases:

• Upfront mortgage insurance premium— 2% of your home's value or the FHA lending limit, whichever is lower, paid once at closing (HUD ML 2017-12).
• Origination fee — capped at 2% of the first $200,000 of value plus 1% of anything above that, with a $2,500 floor and a $6,000 ceiling regardless of home value, under 24 CFR 206.31.
• Ongoing MIP — 0.5% a year on the balance, added monthly. It funds the non-recourse protection described above.
• Standard closing costs — appraisal, title insurance, and recording fees, similar to a traditional mortgage closing.

These costs are usually paid from the loan rather than in cash, so they come out of the principal limit and start accruing interest from day one. The calculator subtracts them for you; open “Closing costs & payout options” to enter a lender's actual origination fee and your own estimate of the other costs.

Reverse Mortgage vs. Home Equity Loan vs. HELOC

All three let you borrow against home equity, but the mechanics differ sharply. A home equity loan or HELOC requires monthly payments starting immediately and typically requires a credit check and income verification, with a balance that shrinks as you pay it down like a normal amortizing loan — see our standard amortization calculatorfor that math. A reverse mortgage requires no monthly payments and is qualified primarily on age, home equity, and the ability to cover ongoing taxes/insurance — but the balance grows rather than shrinks, and it's only available to homeowners 62 and older. Which is better depends entirely on whether you can comfortably make monthly payments and how long you plan to stay in the home.

Methodology and Sources

The principal limit comes from HUD's published factor table and the 2026 limit on HUD's HECM page. Payout options follow 24 CFR 206.25: tenure payments are calculated as if the loan ran to the youngest borrower's age 100, the line of credit grows at the note rate plus the annual MIP rate (24 CFR 206.3), and first-year draws follow the 60% rule in HUD's HECM model loan agreement. The balance projection compounds the rate plus 0.5% MIP monthly, with no principal payments. A lender's figures will also reflect the locked rate, the appraisal and any set-aside for taxes and insurance, which this page does not model. We reference the CFPB's reverse mortgage guidance for eligibility rules, borrower responsibilities, and non-recourse protections. For the math behind every other calculator on this site — where the balance shrinks instead of grows — see our standard amortization methodology page.

Every Reverse Mortgage Calculator on This Site

Each page below runs the same HUD-based calculator, set up for one question, with a guide to that question.

• Reverse Mortgage Purchase Calculator: HECM for Purchase: the down payment needed to buy a home with a reverse mortgage.
• Jumbo Reverse Mortgage Calculator: Homes above the FHA limit: what a HECM leaves on the table and what jumbo loans change.
• Reverse Mortgage Line of Credit Calculator: How an unused HECM line of credit grows each year.
• Reverse Mortgage Amortization Calculator: Reverse mortgage amortization calculator showing how your loan balance grows every year from interest and MIP — the opposite of a normal payoff schedule. Free, no signup.
• HECM Reverse Mortgage Calculator: HECM reverse mortgage calculator for FHA-insured Home Equity Conversion Mortgages — model your growing balance, MIP, and available funds. Free, no signup.
• Reverse Mortgage Eligibility Calculator: Reverse mortgage eligibility calculator: check the age, equity, and financial requirements, then project how much you could actually borrow. Free, no signup.
• Reverse Mortgage Refinance Calculator: Reverse mortgage refinance calculator: model how a new HECM balance would grow after refinancing an existing reverse mortgage. Free, no signup.
• Reverse Mortgage Closing Cost Calculator: Reverse mortgage closing cost calculator: see the origination fee, upfront MIP, and other fees added to your loan balance at closing. Free, no signup.
• Reverse Mortgage Monthly Payment Calculator: Reverse mortgage monthly payment calculator explaining why there's no single payment number — and how age, rate, home value, and payout choice set what you receive.
• HECM for Purchase Calculator: HECM for purchase calculator for the FHA's H4P program — estimate the required down payment, model your loan balance, and see how buying with a reverse mortgage works.
• Reverse Mortgage Interest Calculator: Reverse mortgage interest calculator — see how fixed and adjustable HECM rates are built (index + margin + MIP), how interest compounds, and what it totals over 10-20 years.
• Reverse Mortgage Lump Sum Calculator: Reverse mortgage lump sum calculator: project what a one-time HECM draw costs over 15 years versus gradual withdrawals, and see the 60% first-year cap.
• Reverse Mortgage Equity Calculator: Reverse mortgage equity calculator answering both questions at once: how much equity you need to qualify, and how much you'll have left at years 5, 10, and 15.
• Reverse Mortgage Formula: Reverse mortgage formula, both halves of it: Principal Limit = Maximum Claim Amount × Principal Limit Factor for what you can borrow, and B = P(1+r)^n for how fast the balance compounds. Worked at 5, 10, 15 and 20 years.