Estimate your reverse mortgage proceeds and see how equity changes over time
| Year | Age | Home Value | Loan Balance | Interest Accrued | Annual MIP | Remaining Equity | Equity % |
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This calculator estimates your reverse mortgage proceeds using a simplified principal limit factor (PLF) model based on your age and the expected interest rate. The PLF determines what percentage of your home's value (up to the HECM lending limit of $1,149,825) you can access. Older borrowers and lower interest rates result in higher PLFs and larger available proceeds.
The calculator deducts your existing mortgage balance, closing costs, and the upfront FHA mortgage insurance premium (2% of the maximum claim amount) from the gross principal limit to arrive at your net available proceeds. It then models three payout options: a lump sum (limited to 60% of proceeds in the first year per HECM rules), monthly tenure payments over your estimated remaining life expectancy, and a growing line of credit.
The equity projection chart and amortization table show how your loan balance grows over time due to compounding interest and annual MIP charges (0.5%), while your home value may appreciate. The crossover point — where your loan balance exceeds your home value — is important to watch, though the non-recourse nature of HECM loans means you will never owe more than the home is worth.
The principal limit factor is the core of reverse mortgage calculations. Published by HUD, PLF tables specify the percentage of the maximum claim amount available to borrowers based on their age and the expected interest rate. A 62-year-old at a 5% expected rate might access about 42% of their home's value, while an 80-year-old at the same rate could access roughly 55-60%. This calculator uses an approximation formula that tracks closely with published HUD tables, but actual PLFs may vary.
A reverse mortgage (most commonly a Home Equity Conversion Mortgage or HECM) allows homeowners aged 62 or older to convert part of their home equity into cash without selling the home or making monthly mortgage payments. Instead, the lender pays you — as a lump sum, monthly payments, or a line of credit. The loan balance grows over time as interest accrues and is repaid when the borrower sells, moves out, or passes away.
The amount depends on your age, home value, current interest rates, and the HECM lending limit ($1,149,825 in 2024). Generally, older borrowers with more valuable homes and lower interest rates receive higher proceeds. The principal limit factor (PLF) determines the percentage of your home's value you can access, typically ranging from 40% to 75%. Any existing mortgage must be paid off first from the proceeds.
HECM reverse mortgages offer several payout options: (1) Lump sum — receive all proceeds at once at a fixed rate; (2) Tenure — equal monthly payments for as long as you live in the home; (3) Term — equal monthly payments for a fixed period; (4) Line of credit — draw funds as needed, with the unused portion growing over time; (5) Modified tenure/term — a combination of monthly payments and a line of credit.
No. HECM reverse mortgages are 'non-recourse' loans, meaning you (or your heirs) will never owe more than the home's appraised value at the time of repayment, even if the loan balance exceeds the home's value. FHA mortgage insurance covers the difference. This protection is one of the key features of government-insured reverse mortgages.
Reverse mortgage costs include: an origination fee (up to $6,000), FHA mortgage insurance premium (2% upfront plus 0.5% annually), closing costs (appraisal, title search, inspections), and ongoing interest charges. The upfront MIP and origination fee can typically be financed into the loan. Total upfront costs often range from 3-5% of the home's value, which reduces the net proceeds available to the borrower.