Reverse Mortgage Calculator
A reverse mortgage calculatorprojects the opposite of what every other calculator on this site shows you: instead of a balance that shrinks toward zero as you make payments, a reverse mortgage balance grows every month, because there are no required monthly payments — interest, ongoing mortgage insurance, and any servicing fee simply compound against what you've borrowed. If you've used our standard mortgage amortization calculator, this is the mirror image of that math, and understanding both sides makes the mechanics of either one easier to follow.
Reverse mortgages exist for a specific situation: homeowners 62 or older who want to convert home equity into cash — a lump sum, a line of credit, or monthly payments to themselves — without taking on a monthly payment obligation. The trade-off is that the balance grows instead of shrinking, which means less equity left for the homeowner or their heirs the longer the loan is outstanding. Neither outcome is automatically good or bad; it depends entirely on how long you expect to stay in the home and what you need the money for.
Financial advisors, estate planners, and adult children helping a parent evaluate a reverse mortgage offer all use a calculator like this the same way: to see, in real numbers, how large the balance could realistically get over 10, 15, or 20 years, and whether it's likely to approach the home's value before the loan is expected to come due.
↓ Open the Reverse Mortgage CalculatorTry the Reverse Mortgage Calculator
Reverse mortgages don't amortize like a forward loan — there's no required monthly payment, so interest, mortgage insurance, and any servicing fee compound against the balance every month instead of being paid down. The balance only grows.
Balance After 20 Years
$548,467
Interest & Fees Accrued
$398,467
Estimated Remaining Equity
$0
At this rate, the balance is projected to reach your home's current value around year 16 — HECM reverse mortgages are non-recourse, so you or your heirs would never owe more than the home is worth at that time.
| Year | Balance | Interest & Fees Accrued |
|---|---|---|
| 1 | $160,046 | $10,046 |
| 5 | $207,423 | $57,423 |
| 10 | $286,828 | $136,828 |
| 15 | $396,630 | $246,630 |
| 20 | $548,467 | $398,467 |
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 calculator above takes the current balance, adds interest at your rate plus the ongoing mortgage insurance premium (MIP, commonly 0.5% annually on FHA-insured HECM loans), adds any monthly servicing fee, and 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 roughly $207,000. After 10 years, roughly $287,000. After 15 years, roughly $397,000 — closing in on the home's current value. After 20 years, roughly $548,000, 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 ongoing mortgage insurance premium you see as an input above is exactly what funds 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.
- Origination fee — capped by HUD formula 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.
- Ongoing MIP — the 0.5% annual rate modeled in the calculator above, which funds the non-recourse protection described below.
- Standard closing costs — appraisal, title insurance, and recording fees, similar to a traditional mortgage closing.
Most borrowers roll these costs into the loan rather than paying cash at closing, which means your initial balance drawn in the calculator above should reflect the amount you actually receive, not your total available credit line before fees.
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 growth model above compounds your entered rate plus ongoing MIP monthly against the starting balance, with any servicing fee added each month — no principal payments, since none are required on a reverse mortgage. 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.
Sukie Gao
Sukie Gao builds independent, ad-free-of-bias financial calculators focused on giving homeowners a clear, honest picture of what a mortgage actually costs over time. MortgageAmortizationCalc.com is written and maintained by Sukie, with every formula checked by hand against published amortization tables before publishing.
More from Sukie →Frequently Asked Questions
A regular mortgage amortizes downward: you make monthly payments, and your balance shrinks toward zero over the term. A reverse mortgage runs in the opposite direction — you make no required monthly payments, and interest, mortgage insurance, and any fees compound against the balance every month, so it grows instead of shrinking. The loan becomes due when you sell, move out permanently, or pass away.