Estimate HECM reverse mortgage proceeds for homeowners 62+ based on home value, age, and rate.
Enter 0 if your home is paid off. Existing balance must be paid off from proceeds at closing.
Minimum age for a HECM reverse mortgage is 62.
Current 10-yr CMT + lender margin. Typically 5.5-8% in 2024. Higher rates reduce your principal limit.
Estimated Net Available Proceeds
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Maximum Claim Amount
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Lesser of home value or $1,209,750
Principal Limit
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Est. Closing Costs
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Mortgage Payoff
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Payout Options
This tool provides estimates for educational purposes only. Not financial or tax advice. Neither MayoCalc nor Cook Media Systems assumes any liability. See our Disclaimer and Terms.
What Is a Reverse Mortgage?
A reverse mortgage (specifically a Home Equity Conversion Mortgage, or HECM) allows homeowners aged 62 and older to convert home equity into cash without selling the home or making monthly mortgage payments. Instead, the lender pays you, either as a lump sum, monthly payments, or a line of credit. The loan balance grows over time as interest accrues, and the loan is repaid when you sell the home, move out, or pass away.
How to Use This Calculator
Enter your age, the appraised value of your home, any existing mortgage balance, and the expected interest rate. The calculator estimates how much you could receive from a reverse mortgage based on HUD/FHA principal limit factors, which determine the maximum loan amount based on age, home value, and current interest rates. Older borrowers with higher home values and lower rates receive larger proceeds.
Pros and Cons
Pros: Supplements retirement income without selling your home, no monthly payments required, proceeds are generally tax-free, you retain ownership. Cons: Loan balance grows over time (compounding interest), reduces the inheritance you leave to heirs, upfront costs are high (origination fee, mortgage insurance, closing costs), and you must continue paying property taxes, insurance, and maintenance or risk default.
Reverse Mortgage FAQ
Can I lose my home with a reverse mortgage?
You can default on a reverse mortgage if you fail to pay property taxes, homeowner's insurance, or maintain the home, or if you move out for more than 12 consecutive months. As long as you meet these obligations, you cannot be forced to leave. The loan only becomes due when you sell, move permanently, or pass away.
What happens when the borrower dies?
Heirs have options: repay the loan and keep the home, sell the home and keep any remaining equity, or let the lender take the home. HECMs are non-recourse loans, meaning heirs never owe more than the home is worth, even if the loan balance exceeds the home's value.
How Reverse Mortgages Work
A Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage, allows homeowners aged 62 or older to convert home equity into cash without selling the home or making monthly mortgage payments. Instead, interest accrues on the loan balance, which grows over time. The loan becomes due when the borrower dies, sells the home, or permanently moves out. The borrower (or their heirs) never owes more than the home's value at that time, thanks to the FHA's non-recourse protection.
The amount available depends on the borrower's age (older borrowers qualify for more), current interest rates (lower rates mean higher proceeds), and the home's appraised value (capped at $1,149,825 for FHA-insured HECMs in 2025). A 70-year-old with a $400,000 home might access $180,000-$220,000. Disbursement options include a lump sum, monthly payments, a line of credit, or a combination. The line of credit is often the most flexible option because the unused portion grows over time.
Reverse Mortgage Costs and Considerations
Upfront costs include an origination fee (up to $6,000), FHA mortgage insurance premium (2% of appraised value), and standard closing costs. Ongoing charges include annual mortgage insurance (0.5% of balance) and interest accrual. These costs make reverse mortgages expensive relative to other borrowing options, so they are most appropriate when the borrower plans to stay in the home long-term and has limited other retirement income sources. Borrowers must continue paying property taxes, homeowner's insurance, and maintain the home; failure to do so can trigger loan default. Heirs who inherit a home with a reverse mortgage can pay off the loan balance (or 95% of appraised value, whichever is less) to keep the property. The Home Equity Calculator shows your current equity position.