Calculate reverse mortgage proceeds, monthly payments, and line of credit growth. Includes HECM closing costs, PLF lookup, 60% first-year rule, and equity analysis.
2026 HECM FHA lending limit: $1,249,125. Home values above this are capped.
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A reverse mortgage lets homeowners aged 62 and older convert home equity into cash without selling their home or making monthly mortgage payments. The Home Equity Conversion Mortgage (HECM) is insured by the Federal Housing Administration (FHA) and is the most common type. Our calculator shows exactly how much you could receive based on your age, home value, interest rates, and payout preference.
A Home Equity Conversion Mortgage is a federally insured loan that allows homeowners 62+ to borrow against their home equity. Unlike a traditional mortgage, the lender pays you. You retain ownership, continue living in the home, and the loan is repaid when you sell, move out, or pass away. HECM loans are non-recourse, meaning you or your heirs will never owe more than the home is worth.
Principal Limit Formula
Net Proceeds = (Home Value or FHA Limit, whichever is less) x PLF - Closing Costs - Mortgage BalanceSee exactly how much cash you could receive based on your age and home value, helping you decide if a HECM makes financial sense.
Evaluate lump sum, line of credit, tenure (lifetime), and term payments to find the best fit for your retirement strategy.
Closing costs for HECM loans include origination fees, MIP, and third-party charges. Our calculator provides a complete cost breakdown.
HECM lines of credit grow over time at the loan rate plus 0.5%. This unique feature can significantly increase your available funds.
Understanding remaining equity and loan-to-value ratios helps you and your heirs plan for the future.
Convert home equity into a steady monthly income stream with tenure payments, providing financial stability throughout retirement.
Eliminate monthly mortgage payments by using HECM proceeds to pay off your current loan, freeing up cash flow.
Establish a growing line of credit that increases over time, available for unexpected expenses like medical bills or home repairs.
Fund in-home care, assisted living, or medical expenses without depleting savings or selling your home.
Use reverse mortgage income to bridge the gap, allowing you to delay Social Security until age 70 for higher monthly benefits.
The amount depends on your age, home value, interest rates, and the 2026 HECM FHA lending limit of $1,249,125. Younger borrowers (age 62) typically qualify for 35-55% of home value, while older borrowers (age 80+) may qualify for 50-70%. Our calculator provides an exact estimate based on your specific situation.
HECM borrowers can only access up to 60% of the principal limit (plus mandatory obligations like paying off an existing mortgage) in the first 12 months. The remaining proceeds become available after the first year. This rule protects borrowers from spending too much too quickly.
No, reverse mortgages do not require monthly mortgage payments. The loan balance grows over time as interest and mortgage insurance premiums accrue. You must still pay property taxes, homeowners insurance, and maintain the home. The loan is repaid when you sell, move out, or pass away.
When the last borrower dies or permanently moves out, the loan becomes due. Heirs can repay the loan and keep the home, sell the home and keep any remaining equity, or let the lender sell the home. Because HECM loans are non-recourse, heirs never owe more than 95% of the appraised value.
The PLF is a percentage set by HUD based on the borrower's age and expected interest rate. It determines what portion of the maximum claim amount you can borrow. Higher age and lower interest rates result in a higher PLF. For example, a 75-year-old at 5.5% rate has a PLF of approximately 46.7%.
You retain ownership and can live in the home as long as it remains your primary residence. However, the loan can become due if you fail to pay property taxes, maintain homeowners insurance, or keep the home in reasonable condition. HUD counseling before closing helps ensure borrowers understand these obligations.
The unused portion of a HECM line of credit grows at the current interest rate plus the 0.5% annual mortgage insurance premium. This guaranteed growth is unique to HECM reverse mortgages and does not exist with traditional HELOCs. Over 10-20 years, this growth can significantly increase your available credit.
HECM closing costs include an origination fee (up to $6,000), initial mortgage insurance premium (2% of the maximum claim amount), third-party charges (appraisal, title insurance, recording fees), and HUD counseling ($125). Most costs can be financed into the loan so you do not pay out of pocket.