Calculate potential reverse mortgage proceeds based on your home value, age, interest rate, and fees. See estimated lump sum, monthly payments, or line of credit amounts available through a Home Equity Conversion Mortgage (HECM).
A reverse mortgage is a loan that lets homeowners aged 62 and older convert part of their home equity into cash without selling the home or making monthly mortgage payments. Instead of you paying the lender every month (as with a traditional mortgage), the lender pays you — either as a lump sum, monthly income, or line of credit. The accumulated balance plus interest is repaid when the home is sold, the last surviving borrower moves out permanently, or the borrower passes away.
The most common reverse mortgage in the U.S. is the Home Equity Conversion Mortgage (HECM), a federally insured product administered by HUD and FHA. HECMs have specific safeguards: the borrower can never owe more than the home is worth at sale (non-recourse), the borrower retains title to the home, and FHA insurance protects both lender and borrower against shortfall risk. Non-HECM "proprietary" reverse mortgages exist for higher-value homes but lack the federal protections.
This calculator estimates the principal limit (the maximum amount you could borrow) and the available proceeds after paying off any existing mortgage and closing costs. The actual available amount depends on your age (older borrowers receive more — the formula assumes shorter expected loan duration), home value (capped at the FHA lending limit, $1,209,750 in 2025), current interest rates (lower rates allow larger principal limits), and existing liens that must be paid off at closing. Treat the output as a planning estimate. Real reverse mortgages have complex fee structures and significant counseling requirements — never sign without independent advice.
$500,000 home value, age 75, 6.5% rate, no existing mortgage, $10,000 closing costs. Principal limit factor at age 75: ~0.54 Principal limit: $500,000 × 0.54 = $270,000 Net proceeds (after closing costs): $260,000 Available as: $260,000 lump sum OR ~$1,580/month tenure for life OR $260,000 line of credit (with unused portion growing at the loan rate). A meaningful retirement supplement. Line of credit option is often preferred — it provides flexibility, accrues no interest on the undrawn portion, and the credit line itself grows over time.
$1,500,000 home (but FHA limit is $1,209,750), age 62, 7% rate, $200,000 existing mortgage, $15,000 closing costs. Principal limit factor at age 62, 7% rate: ~0.38 Principal limit: $1,209,750 × 0.38 = $459,705 (home value capped at FHA limit) Less existing mortgage: $459,705 − $200,000 = $259,705 Less closing costs: $259,705 − $15,000 = $244,705 Net available: ~$245,000 For high-value homes, consider proprietary jumbo reverse mortgages from private lenders — they handle homes above the FHA limit but lack federal insurance protections. Carefully evaluate the trade-off.
$200,000 initial draw at age 65, 6.5% loan rate. Year 5: $200,000 × 1.065^5 ≈ $274,000 Year 10: $200,000 × 1.065^10 ≈ $375,000 Year 15: $200,000 × 1.065^15 ≈ $514,000 Year 20: $200,000 × 1.065^20 ≈ $705,000 Year 25: $200,000 × 1.065^25 ≈ $967,000 If the borrower lives in the home 25 more years, the balance grows to nearly $1M — exceeding many homes' eventual sale value. Non-recourse protection means the borrower (or estate) never owes more than the home sells for, but heirs receive nothing if the loan balance equals or exceeds sale proceeds. This balance-growth dynamic is why reverse mortgages are most valuable for older borrowers (less time for the balance to compound) and for borrowers who plan to leverage the home substantially in their later years rather than as an early-retirement strategy.
Use this calculator when considering a reverse mortgage as part of a retirement income strategy, when evaluating whether home equity should be tapped vs. preserved for inheritance, or when comparing reverse mortgage proceeds to alternatives (downsizing, traditional HELOC, family loan, selling).
Reverse mortgages make the most sense when: (1) the borrower has substantial home equity but limited income or savings, (2) the borrower intends to stay in the home for many years (the upfront costs make short-term use economically disastrous), (3) leaving the home as an inheritance is not a priority, and (4) the borrower (and any spouse) can handle the ongoing requirements (property taxes, insurance, maintenance — failure to keep current can trigger foreclosure).
Reverse mortgages make less sense when: the borrower might move within 5 years, the high upfront costs would consume a large fraction of the proceeds, the borrower has other retirement assets that should be tapped first, or leaving the home to heirs is a priority. In many cases, downsizing to a smaller home and investing the proceeds produces similar income with more flexibility and no compounding loan balance.
Pair this with the home-equity calculator (alternative ways to tap equity), the HELOC calculator (HELOC may be a better fit for shorter time horizons), the retirement-savings calculator (to confirm the gap that a reverse mortgage would fill), and the FIRE calculator (to model retirement income from all sources combined).
A vital point: reverse mortgages are heavily marketed, sometimes aggressively, to seniors. Always (1) complete the HUD-required counseling before applying, (2) consult an attorney and trusted family members, (3) be skeptical of high-pressure sales — legitimate reverse mortgage products don't require fast decisions, and (4) understand exactly what happens after death or move-out. Many family disputes and financial losses come from misunderstanding what a reverse mortgage actually is.
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Net Available
$88,371
Principal Limit
$146,371
Lump Sum
$88,371
| Year | Loan Balance | Home Value | Equity |
|---|---|---|---|
| 1 | $155,885.33 | $412,000.00 | $256,114.67 |
| 2 | $166,017.87 | $424,360.00 | $258,342.13 |
| 3 | $176,809.04 | $437,090.80 | $260,281.76 |
| 4 | $188,301.62 | $450,203.52 | $261,901.90 |
| 5 | $200,541.23 | $463,709.63 | $263,168.40 |
| 6 | $213,576.41 | $477,620.92 | $264,044.51 |
| 7 | $227,458.88 | $491,949.55 | $264,490.67 |
| 8 | $242,243.70 | $506,708.03 | $264,464.33 |
| 9 | $257,989.54 | $521,909.27 | $263,919.73 |
| 10 | $274,758.86 | $537,566.55 | $262,807.69 |
| 11 | $292,618.19 | $553,693.55 | $261,075.36 |
| 12 | $311,638.37 | $570,304.35 | $258,665.98 |