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What a reverse mortgage calculator has to explain
A reverse mortgage is unlike any other home loan. You get money and make no monthly payment on it, so the balance rises over time instead of falling. That makes a forward-looking calculator more useful than a payment one. The question is not "what will I pay each month" but "how much cash do I get today, and how much of my home will be left later." This tool answers both, using the FHA-insured Home Equity Conversion Mortgage (HECM), which accounts for the great majority of reverse mortgages.
How it works
You enter the age of the youngest borrower, your home value, any mortgage you still owe, the loan rate and the closing costs you expect. The calculator caps the home value at the FHA limit to get the maximum claim amount, multiplies that by a principal limit factor to get the most you can borrow, and subtracts the costs and your existing mortgage. What is left is your estimated cash. The table underneath grows the balance month by month so you can see the trade.
How the estimate is calculated
Maximum claim amount is the lower of home value and $1,249,125. Principal limit is maximum claim amount × principal limit factor. Upfront costs are 2% of the maximum claim amount + origination fee (up to $6,000) + other closing costs. Net cash is principal limit − costs − mortgage payoff. The balance then grows at your rate plus the 0.5% annual insurance premium.
Illustration: age 72, $450,000 home, $100,000 mortgage, 6.0% rate
The tool estimates a principal limit factor of about 40.8%, so the principal limit is roughly $183,600. Costs come to about $19,000 (a $9,000 insurance premium, a $6,000 origination fee and $4,000 of other costs). After paying off the $100,000 mortgage, roughly $64,600 is left as cash. If the home were paid off, that would be about $164,600.
Taking it all as a lump sum, the balance would be near $351,000 after 10 years and $671,000 after 20. With the home growing 3% a year, equity left would be about $253,700 at year 10 and $141,400 at year 20. These are illustrations, and the factor is an approximation, not a quote.
What to weigh before you apply
Compare it with the alternatives
If you want cash but plan to stay, a HELOC charges interest but has no insurance premium, though it requires monthly payments. If your goal is to shrink housing costs, downsizing or a lower-rate refinance might do more. If you are still working out the cost of staying, the main mortgage calculator shows what your current loan really costs.
Costs come from equity, not cash
Because fees and interest are added to the balance, a reverse mortgage costs more the longer it lasts. It can make sense for someone who expects to stay for many years and has few other resources. It is a poor fit if you may move soon.
Get counseling
HUD requires it, and it is worth taking seriously. The counselor can explain the payout choices, including a lump sum, a line of credit or monthly payments, and how each affects your balance.
Estimate only. This is not an offer, and the principal limit factor here is an approximation of HUD's tables. Speak with a HUD-approved HECM counselor.
Frequently asked questions
Who qualifies for a reverse mortgage?
For the FHA-insured HECM, the youngest borrower must be at least 62, the home must be your primary residence, and you must have substantial equity. You also have to complete counseling with a HUD-approved counselor before you can apply, and keep paying property taxes, insurance and upkeep.
How much can I get from a reverse mortgage?
It depends on three things: the age of the youngest borrower or eligible non-borrowing spouse, the lesser of your home value and the FHA limit, and the expected interest rate. The 2026 limit on the home value HUD will count is $1,249,125. Older borrowers and lower rates get a bigger share of the value.
What does a reverse mortgage cost?
HECMs charge an upfront mortgage insurance premium of 2% of the maximum claim amount, an annual premium of 0.5% of the loan balance, an origination fee capped at $6,000, and normal third-party closing costs. Most of it is usually financed into the loan, so you feel it as a bigger balance rather than a check at closing.
Do I have to make monthly mortgage payments?
No monthly principal and interest payment is required while you live in the home. Interest and premiums are added to the balance. The loan comes due when the last borrower moves out, sells or dies. You are still responsible for taxes, homeowners insurance and maintenance, and missing those can trigger default.
What happens to my heirs?
The loan is non-recourse, meaning you or your heirs never owe more than the home is worth when it is sold. Heirs can keep the home by paying off the balance, or sell it and keep any equity left over. The table on this page shows how much equity remains at different times under your growth assumption.
Why is the calculator only an estimate?
Because HUD uses a table of principal limit factors that depends on exact age and the expected rate on the day you apply. This page uses an approximation of that table so you can see the shape of the numbers. Ask a lender for a HECM illustration, and enter its factor in the override field to make this tool match.