Reverse Mortgage Calculator

How This Calculator Works

This calculator uses HUD's Principal Limit Factor (PLF) tables to estimate your available reverse mortgage proceeds. The PLF is determined by two variables: the age of the youngest borrower and the expected interest rate. We use a conservative expected rate of approximately 6.5% for these estimates.

The calculation starts with your home's appraised value (or the 2026 HECM maximum claim amount of $1,249,125, whichever is lower). This maximum claim amount is multiplied by the PLF for your age to determine your principal limit — the gross amount available before deductions.

From the principal limit, mandatory costs are subtracted: the upfront mortgage insurance premium (2% of the maximum claim amount), estimated closing costs, and your existing mortgage balance (which must be paid off at closing). The remainder is your net available proceeds.

Actual loan amounts will depend on current interest rates at the time of application, your property's appraised value, and specific lender fees. A lower expected rate generally means higher available proceeds. Always consult with a HUD-approved housing counselor and licensed lender for figures specific to your situation.

Understanding Your Payout Options

One of the key benefits of a HECM reverse mortgage is flexibility in how you receive your funds. You can choose from three primary options — or combine them to suit your financial needs.

Lump Sum

Receive the full net available amount at closing as a single disbursement. This option is available only with a fixed interest rate, and HUD limits the initial draw to 60% of the principal limit in the first year (unless you need more to pay off an existing mortgage or mandatory obligations). A lump sum is often chosen by borrowers who need to pay off a large existing mortgage, fund a major home renovation, or cover a significant one-time expense.

Line of Credit

Set up a credit line you can draw from whenever you choose, in any amount. The unique advantage of the HECM line of credit is its growth feature: the unused portion of your credit line grows over time at a rate tied to the loan's interest rate plus the annual MIP rate (approximately 4.5% annually). This means your available credit increases even as your home's value stays flat or decreases. It is one of the most popular options for borrowers who want financial flexibility.

Monthly Tenure Payment

Receive equal monthly payments for as long as you live in your home as your primary residence. The payment amount is calculated using actuarial tables based on your age. This option provides predictable, steady income and is ideal for borrowers looking to supplement Social Security, a pension, or other retirement income. Because the payments continue for life (regardless of how long you live), borrowers who live longer may ultimately receive more than their original principal limit.

The Line of Credit Growth Feature

The HECM line of credit growth rate is one of the most compelling features of a reverse mortgage. Unlike a traditional home equity line of credit (HELOC), where your available balance decreases as your home's value falls or interest rates rise, the HECM credit line grows automatically over time. Your available funds increase whether or not your home appreciates.

For example, if you start with $100,000 in available credit and the growth rate is 4.5%, your unused credit line would grow to approximately $124,600 in five years and $155,300 in ten years — even if you never draw a penny. This makes the line of credit especially powerful for borrowers who want a financial safety net that becomes larger over time.

Learn more about how reverse mortgage types work in our Types of Reverse Mortgages guide, or explore the full breakdown of Costs and Fees involved.

Related Resources

• Types of Reverse Mortgages — HECM, proprietary, and single-purpose loans compared
• Costs & Fees — Origination fees, MIP, servicing costs, and more
• Eligibility Requirements — Age, equity, and property qualifications
• Find a HUD Counselor — Required before applying for any HECM loan
• Home Equity Calculator — See how much equity you have built up