Reverse Mortgage Monthly Payment Calculator

A HECM — the FHA-insured reverse mortgage that makes up most of the market — lets borrowers aged 62 and older take their proceeds in five basic shapes:

• Tenure payments — equal monthly disbursements that continue for as long as at least one borrower lives in the home as a principal residence, regardless of how long that turns out to be.
• Term payments — larger equal monthly disbursements, but only for a fixed number of years that you select up front.
• Line of credit — no monthly check at all; you draw funds when you want them, and the unused portion grows over time.
• Lump sum — a single disbursement at closing, generally the structure used with fixed-rate HECMs.
• Modified combinations — a smaller tenure or term payment paired with a line of credit held in reserve, mixing steady income with a flexible cushion.

Only the first two and the modified versions produce a monthly payment, which is why the calculator makes you choose before it can be honest with you. Our broader reverse mortgage calculator page compares all five structures at greater length.

The starting point for every payout is the principal limit — the maximum the loan will advance, set by multiplying the home's value (capped by the FHA lending limit) by a factor published by HUD that depends on the youngest borrower's age and the loan's expected interest rate. From that limit, closing costs come off the top: the upfront mortgage insurance premium of 2% of the maximum claim amount, origination fees, and third-party costs, plus any existing mortgage balance that must be paid off at closing.

What remains is the net amount available, and a tenure payment converts it into monthly checks using annuity-style math: the available funds are spread across the months between the youngest borrower's age and age 100, at a rate that includes the expected interest rate plus the 0.5% annual mortgage insurance accrual. It's conceptually the reverse of a regular mortgage payment calculation — instead of finding the payment that retires a balance to zero, it finds the payment a fixed pool of borrowing capacity can sustain over a defined horizon.

Spreading the same available funds over fewer months produces bigger checks — that's the entire term-versus-tenure tradeoff. A 10-year term plan might pay meaningfully more per month than a tenure plan for the same borrower, but in year eleven the checks stop, even though the loan itself (and its growing balance) continues. Tenure pays less per month but keeps paying for as long as you occupy the home, whether that's 8 years or 30.

Term plans tend to suit borrowers bridging a defined gap — say, covering the years between retiring at 66 and claiming a larger Social Security benefit at 70 — while tenure suits borrowers who want a payment they cannot outlive while they remain in the home. The calculator lets you run both against identical inputs, which is the only fair way to compare them. One nuance worth knowing: choosing a term plan doesn't shorten the loan itself — the mortgage remains in place after the checks stop, interest keeps accruing on what was disbursed, and nothing becomes due until a maturity event such as selling, moving out, or the last borrower's death.

Age. Older borrowers get higher principal limit factors because the loan is expected to be outstanding for fewer years. A 78-year-old will generally see a noticeably larger tenure payment than a 63-year-old with the same home and rate — and the calculation always uses the youngest borrower's age when a couple applies.

Interest rate. Higher expected rates cut the principal limit, because more of the home's value must be held in reserve for the interest that will accrue. Rate moves of a single percentage point can shift available proceeds substantially, which is why quotes from different weeks can differ even when nothing about you changed.

Home value. More appraised value means more borrowing capacity, up to the FHA lending limit — above that cap, extra value adds nothing to a HECM's math. Whether you clear the basic hurdles in the first place — age 62+, principal residence, sufficient equity — is a separate question our reverse mortgage eligibility calculator is built to answer.

Take a 74-year-old sole borrower with a $500,000 home, no existing mortgage, and an expected rate around 7%. Principal limit factors at that age and rate typically land the gross limit somewhere near 35-42% of home value — call it roughly $175,000 to $210,000. Subtract the upfront MIP (2% of $500,000 = $10,000) and perhaps $6,000-$9,000 in origination and closing costs, and the net available funds land in the neighborhood of $160,000 to $190,000.

Converted to tenure payments spread over the 312 months to age 100 at an accrual rate near 7.5% (expected rate plus 0.5% MIP), that range supports roughly $1,100 to $1,450 per month. Treat this strictly as an illustration of the mechanics, not a quote: HUD's factor tables, your appraisal, and the rate on the day you lock all move the result. Enter your own age, home value, and rate in the calculator above to produce a range built from your numbers rather than ours.

This is tenure's defining feature: the payments are structured as if the loan runs to age 100, but they don't stop if you live past the point where the math notionally runs out. As long as at least one borrower keeps the home as a principal residence, keeps up property taxes, homeowners insurance, and basic maintenance, tenure disbursements continue — a 74-year-old who lives in the home to 103 keeps receiving checks at 101 and 102. The FHA insurance that borrowers fund through their premiums exists partly to make this promise credible: the lender is protected even when total disbursements plus accrued interest exceed what the home can repay, and the borrower's obligation is capped by the non-recourse guarantee.

Every monthly disbursement you receive is added to your loan balance, and interest plus the 0.5% annual mortgage insurance accrue on that growing balance each month — with no payments required to offset the growth. After ten years of $1,200 monthly checks, you'll have received $144,000, but the balance owed will be substantially more than that, because each early check has been compounding for years. This isn't a hidden fee; it's negative amortization, and it's the price of converting home equity into income without a repayment obligation. Before committing to a payout plan, run the same inputs through our reverse mortgage amortization calculator to see the balance side of the ledger year by year — the monthly payment and the growing balance are two views of one transaction, and looking at only the pleasant one is how borrowers end up surprised.

If steady income matters less to you than flexible access, compare the numbers against our reverse mortgage line of credit calculator, where nothing accrues until you actually draw.

Reverse mortgage disbursements are loan advances, not earnings, and the IRS generally does not treat loan proceeds as taxable income — the money was already yours in the form of home equity; you're borrowing against it, not realizing a gain. Tenure and term payments therefore generally arrive without income-tax consequences and don't count as earnings for Social Security purposes. Two careful caveats belong next to that sentence: interest that accrues on a reverse mortgage generally isn't deductible until it's actually paid, usually when the loan ends, and large sums sitting in a bank account can affect asset-tested programs such as Medicaid or SSI. Tax treatment depends on individual circumstances — this is educational context, not tax advice, and a tax professional should confirm how the rules apply to you.

The figures on this page follow the HECM program's published structure: FHA insurance, borrowers 62 and older, an upfront mortgage insurance premium of 2% of the maximum claim amount, ongoing MIP accruing at 0.5% annually on the outstanding balance, non-recourse treatment at payoff, and the counseling session with a HUD-approved counselor that every HECM borrower must complete before application. Program rules, current lending limits, and counselor directories are maintained on HUD's HECM program page, and the Consumer Financial Protection Bureau publishes plain-language guidance on payout choices. The worked example uses representative mid-2026 assumptions, not quotes. For a deeper walkthrough of the FHA-specific mechanics, see our HECM reverse mortgage calculator guide, or start from the mortgage amortization calculator homepage to see how this tool relates to the forward-mortgage calculators on the rest of the site.