Understanding Your Reverse Mortgage Estimate
Our calculator provides an estimate based on a simplified version of the formula used for HECM (Home Equity Conversion Mortgage) loans. The actual amount you can borrow, known as the Principal Limit, depends on several factors:
- Your Age: The older you are, the more you can typically borrow. Our calculator requires you to be at least 62, the minimum age for a reverse mortgage.
- Home Value: Your home's appraised value is a key component. The calculation uses your home value up to the current FHA HECM limit of $1,149,825 for 2024.
- Current Interest Rate: The "expected rate" (a combination of a market index and a lender margin) influences how much you can borrow. Lower rates generally mean higher proceeds. Our tool uses a proxy for current rates.
- Existing Mortgage: Any existing mortgage on your property must be paid off with the reverse mortgage proceeds. Our calculator subtracts this from your total estimated proceeds.
The amount shown is an estimate of the total funds available. From this, you must pay off any existing mortgage and cover closing costs. The remaining amount is what you can access as a lump sum, monthly payments, or a line of credit.
Have More Questions?
For a detailed breakdown of how reverse mortgages work, the costs involved, and the key responsibilities of the borrower, be sure to read our complete guide.
Read the Ultimate Guide to Reverse Mortgages