How to Calculate a Reverse Mortgage
If you're 62 or older, a reverse mortgage lets you borrow against your home equity without making monthly payments. This calculator estimates how much you could get based on your age, home value, and current rates.
Steps
Enter your age
You need to be at least 62 for a HECM (Home Equity Conversion Mortgage — the most common type). And the older you are, the more you can borrow. The lender expects a shorter repayment window, so they offer more upfront.
Enter your home's appraised value
Use your best estimate of the home's current market value. The lender will order a real appraisal later, but for now, check recent comparable sales in your area. The calculator caps at HUD's HECM lending limit, which is $1,149,825 currently.
Enter any existing mortgage balance
Still owe money on your home? That balance gets paid off first from the reverse mortgage proceeds. Own it outright? You get access to the full available amount. A $100,000 remaining mortgage on a $400,000 home cuts into your available proceeds pretty significantly.
Review payout options
You'll see estimated proceeds under different payout options: lump sum (one big payment), monthly payments (tenure plan — keeps going as long as you live in the home), line of credit (draw when you need it), or a mix. Each option shows different amounts because interest accrues differently for each.
Is a Reverse Mortgage Right for You?
A reverse mortgage loan makes sense in specific situations. And it's a terrible idea in others. It works well when you plan to stay in your home long-term, you've got significant equity but limited income, you've already looked at other options for supplementing retirement, and you don't plan to leave the home to heirs. It's risky when you might need to move within a few years (upfront costs make short-term reverse mortgages expensive), when you have a spouse under 62 who isn't on the loan (they could lose the home if you pass first — protections have improved but it's still a concern), or when you'd honestly be better off downsizing. One more thing: you're required by law to talk to a HUD-approved counselor before getting a reverse mortgage. Run the reverse mortgage loan calculation here first so you walk into that conversation with actual numbers.
Frequently Asked Questions
Yes. You keep the title. You can live there as long as you want. The loan comes due when you sell, move out permanently, or pass away. At that point, the home typically gets sold and the loan plus accrued interest gets repaid from the proceeds. Whatever equity is left goes to you or your heirs.
Here's the important part: reverse mortgages are non-recourse loans. If the balance grows larger than the home's value — and it can, because interest compounds over years — you or your heirs never owe more than the home is worth. FHA insurance covers the gap. That's one of the big protections built into HECM loans.
Yes. And they're not small. Origination fee up to $6,000. Mortgage insurance premium — 2% upfront plus 0.5% annually. Appraisal fee $300-$600. Plus closing costs. You can usually roll all of this into the loan so nothing comes out of pocket, but it reduces what you actually receive.