Retirement Tools
Reverse Mortgage Calculator
Estimate HECM principal limit, closing costs, and monthly proceeds for borrowers 62+. No signup required.
Reverse Mortgage Details
Borrower must be 62 or older
Must be paid off with reverse mortgage proceeds
Added to index rate
Net Available to You
$0
Payment Options
Servicing fee: $35/mo ($420/yr)
Insights
How Reverse Mortgages Work
A reverse mortgage—most commonly structured as a Home Equity Conversion Mortgage (HECM) insured by the Federal Housing Administration (FHA)—allows homeowners aged 62 and older to convert a portion of their accumulated home equity into tax-free cash without having to sell their home or make monthly mortgage payments.
Unlike a traditional forward mortgage where you make monthly payments to pay down your balance, a reverse mortgage functions in reverse: the loan balance increases over time as interest and fees accrue against your home equity. The loan is not repaid until the last surviving borrower permanently leaves the home, sells the property, or passes away.
To qualify, you must occupy the home as your primary residence, maintain property taxes and homeowners insurance, and satisfy a financial assessment verifying your ability to manage ongoing housing expenses. Any existing forward mortgage balance must be paid off immediately using a portion of your reverse mortgage proceeds.
HECM Costs: What You Pay Upfront
Reverse mortgages involve specialized closing costs and insurance premiums designed to guarantee that you will never owe more than the home's market value when the loan is repaid. Key costs include:
- Upfront Mortgage Insurance Premium (MIP): Standard 2% charge on the appraised home value (capped at the HECM ceiling).
- Origination Fee: Charged by the lender to process the loan, capped by FHA regulations at 2% of the first $200,000 and 1% of the remaining value, up to a maximum of $6,000.
- Third-Party Fees: Appraisal, title search, recording fees, credit report, and mandatory independent counseling fees.
Frequently asked questions
Who qualifies for a reverse mortgage?
To qualify for a Home Equity Conversion Mortgage (HECM), the youngest borrower must be at least 62 years old, own the property outright or have significant equity (typically 50% or more), use the home as their primary residence, and pass a financial assessment demonstrating the ability to pay ongoing property taxes, homeowner insurance, and maintenance.
How much can I get from a reverse mortgage?
The amount you can borrow—known as your Principal Limit—depends on your age (or the age of the youngest co-borrower), current expected interest rates, and the lesser of your home's appraised value or the 2026 HECM lending limit of $1,249,125. Older borrowers and lower interest rates yield higher borrowing limits.
What are the costs of a reverse mortgage?
Reverse mortgages carry upfront and ongoing fees, including an initial Mortgage Insurance Premium (MIP) of 2% of the home's value, a lender origination fee (capped at $6,000), third-party appraisal and closing fees, and a monthly servicing fee (typically $35).
When does a reverse mortgage need to be repaid?
A reverse mortgage does not require monthly principal and interest payments. It becomes due and payable when the last surviving borrower sells the home, moves out permanently, passes away, or fails to fulfill loan obligations such as paying property taxes and insurance.
Is a reverse mortgage a good idea?
A reverse mortgage can provide vital retirement cash flow and eliminate monthly mortgage payments for seniors on fixed incomes. However, it reduces your home equity inheritance for heirs and carries significant upfront closing costs. Consulting a HUD-approved reverse mortgage counselor is mandatory before signing.