Reverse Mortgage Calculator (HECM Estimate)
Estimate the proceeds a US homeowner age 62 or older might receive from an FHA-insured Home Equity Conversion Mortgage. This is a rough educational estimate, not a lender quote. Actual figures require HUD-approved counseling and a firm offer from an FHA-approved lender.
The expected rate is a long-term rate assumption HUD uses to size the loan, not the rate you pay month to month. Higher expected rates shrink the available proceeds. This tool models rates between 3% and 8%.
Estimate only. Lenders must use HUD's exact principal limit factor tables, an appraisal, and actual fees. If the estimate is $0, the existing mortgage and costs exceed the principal limit.
How this estimate is calculated
1. Maximum claim amount. The lesser of your home's appraised value or the FHA HECM lending limit, which is $1,249,125 for case numbers assigned in calendar year 2026 (HUD Mortgagee Letter 2025-22). Value above the limit earns no additional proceeds under the HECM program.
2. Principal limit. The claim amount multiplied by a principal limit factor (PLF) from HUD's tables. The PLF rises with the age of the youngest borrower and falls as the expected interest rate rises. This page anchors to published HUD factors at a 5.875% expected rate (for example, about 40.9% at age 70) and approximates other rates; a lender uses the exact table.
3. Deductions. Any existing mortgage must be paid off from the proceeds at closing. Upfront costs include the initial mortgage insurance premium of 2% of the claim amount, an estimated origination fee (HUD formula: greater of $2,500, or 2% of the first $200,000 of value plus 1% above that, capped at $6,000), and a flat $2,500 allowance for appraisal, title and other third-party closing costs. Actual fees vary and are negotiable.
Not modeled: the 0.50% annual MIP that accrues on the outstanding balance, servicing fees, life-expectancy set-asides, and the first-year draw cap (generally 60% of the principal limit on adjustable-rate HECMs). Interest compounds on whatever you borrow, so the loan balance grows over time.
Sample principal limit factors (5.875% expected rate)
| Age of youngest borrower | Approximate PLF | Share of $400,000 home |
|---|---|---|
| 62 | 35.1% | $140,400 |
| 70 | 40.9% | $163,600 |
| 75 | 43.8% | $175,200 |
| 80 | 48.2% | $192,800 |
| 90 | 61.4% | $245,600 |
Factors shown are HUD table values at a 5.875% expected rate, before paying off any existing mortgage and before upfront costs.
Frequently asked questions
What is the minimum age for a reverse mortgage?
For the FHA-insured Home Equity Conversion Mortgage (HECM), the youngest borrower (or eligible non-borrowing spouse) must be at least 62 years old when the loan closes. Some proprietary or jumbo reverse mortgages accept borrowers as young as 55 in some states, but those are not FHA-insured and follow different rules.
How can I receive reverse mortgage proceeds?
HECM proceeds can be taken as a lump sum (the only option for a fixed-rate HECM), a line of credit you draw as needed (adjustable-rate only, and the unused portion grows over time), monthly term or tenure payments, or a combination of monthly payments and a line of credit. First-year draws on adjustable-rate HECMs are generally capped at 60% of the principal limit unless mandatory obligations require more.
What happens when the borrower moves out or passes away?
The loan becomes due and payable when the last borrower (or eligible non-borrowing spouse) sells the home, no longer occupies it as a principal residence for 12 consecutive months, or passes away. Heirs can repay the loan and keep the home, sell the home (a sale for at least 95% of appraised value satisfies the debt), or hand the home to the lender. A HECM is non-recourse: neither the borrower nor the heirs ever owe more than the home's value at sale.
Are reverse mortgage proceeds taxable?
No. Reverse mortgage proceeds are loan advances, not income, so they are not subject to federal income tax and generally do not affect Social Security or Medicare benefits. Interest is not deductible until it is actually paid, usually when the loan is repaid. Confirm your situation with a tax professional, especially regarding means-tested benefits such as Medicaid or SSI.