Reverse Mortgage Calculator (HECM)

How the estimate works

A HECM’s borrowing power starts with the principal limit: your home’s value, up to the 2026 FHA limit of $1,249,125, multiplied by a factor HUD publishes for the youngest borrower’s age and the expected interest rate. Older borrowers and lower rates mean a higher factor. This calculator uses HUD’s own factor table, not an approximation.

From the principal limit, any existing mortgage is paid off first, along with the upfront FHA mortgage insurance (2% of the home value counted), the origination fee and other closing costs. What is left is yours to take as a line of credit, monthly payments, cash, or a mix. In the first 12 months you can use up to 60% of the principal limit, or more when it is needed to pay off a larger existing mortgage.

The line of credit grows

The unused part of a HECM line of credit grows at the same rate as the loan balance: the note rate plus the 0.50% annual FHA insurance. That growth is not interest paid to you. It is added borrowing capacity, which is why some homeowners set up a HECM early and leave the line untouched as a standby reserve.

Buying with a HECM for Purchase

Switch the calculator to HECM for Purchase to see the down payment needed to buy a new home with a reverse mortgage in a single closing. The down payment must come from your own funds, often the sale of your current home. After closing there is no required monthly principal and interest payment, which is why buyers who are downsizing or moving closer to family look at it.

What to weigh

A reverse mortgage is still a loan. Interest and mortgage insurance are added to the balance every month, so the balance rises and your equity falls over time. You keep the title and must pay property taxes, homeowners insurance and any HOA dues, keep the home in good repair, and live there as your principal residence. The loan is repaid when the last borrower sells, moves out or passes away. Because a HECM is non-recourse, the amount owed can never exceed the home’s value when the loan is repaid, so neither you nor your heirs cover a shortfall. Every borrower completes independent counseling with a HUD-approved agency before applying.

Related

All calculators · Reverse mortgages (HECM) · Closing cost estimator

Want the real numbers instead of estimates? I am David Silva, a mortgage loan officer in Westminster, CO (NMLS 1352284), licensed in Colorado, California, Georgia and Texas. Send me your scenario and I will run it with your actual ages, home value, payoff and current reverse mortgage pricing.