Reverse Mortgage Calculator

Category: Mortgage and Real Estate
- April 22, 2025
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Estimate how much you may be eligible to receive from a reverse mortgage based on your age, home value, and interest rates.

Borrower Information

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Loan Information

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Advanced Options

About Reverse Mortgages

A reverse mortgage is a loan available to homeowners 62 years or older that allows them to convert part of the equity in their home into cash. The loan is called a "reverse" mortgage because instead of making payments to the lender, the lender makes payments to the borrower.

Key Reverse Mortgage Factors
  • Principal Limit Factor (PLF): The percentage of the home's value that can be borrowed, based primarily on the borrower's age and current interest rates.
  • Interest Rate: The rate at which the loan balance grows over time.
  • Initial Costs: Includes origination fees, mortgage insurance premiums, and other closing costs.
  • Payout Options: Lump sum, line of credit, monthly payments, term payments, or a combination.
Important Considerations

Reverse mortgages have several important considerations:

  • The loan balance grows over time as interest and fees accumulate
  • Borrowers must continue to pay property taxes, insurance, and maintain the home
  • The loan becomes due when the last borrower sells the home, moves out, or passes away
  • A reverse mortgage may affect eligibility for some government benefits
  • Consult with a HUD-approved counselor before proceeding with a reverse mortgage

What Is a Reverse Mortgage Calculator?

The Reverse Mortgage Calculator is a practical tool for homeowners aged 62 and older to estimate how much money they can borrow against their home’s equity. It offers a simple way to understand loan eligibility, compare payout options, and evaluate financial outcomes — all without needing to crunch the numbers manually.

Unlike a typical mortgage calculator or home loan estimator that helps with monthly mortgage payments, this calculator focuses on equity conversion. It’s especially helpful for retirement planning, offering insights into potential lump sum payments, monthly income, or access to a line of credit.

How the Reverse Mortgage Works

With a reverse mortgage, homeowners borrow money based on the value of their property, their age, and current interest rates. The loan doesn’t require monthly repayments and is typically repaid when the home is sold or the homeowner moves out or passes away.

Principal Limit = Home Value × Principal Limit Factor (PLF)

The Principal Limit Factor is determined by the age of the youngest borrower and the expected interest rate. As borrowers get older, or if interest rates are lower, the PLF increases — allowing a larger loan amount.

Using the Reverse Mortgage Calculator

To get started, simply enter the following details:

  • Home Value – The current estimated value of your property.
  • Borrower Age – Your age (minimum 62).
  • Co-Borrower – If applicable, provide your co-borrower’s age.
  • Interest Rate – The expected rate used to determine loan terms.
  • Existing Mortgage – Any outstanding loan balance on your home.
  • Closing Costs – An estimate of fees related to loan setup.
  • Payout Type – Choose between a lump sum, monthly payments, or a line of credit.

After entering your details, click Calculate. You'll receive a full breakdown that includes:

  • Available Loan Amount
  • Principal Limit
  • Monthly Payment (if selected)
  • Effective Interest Rate
  • Amortization Schedule

Why This Calculator Is Useful

This reverse mortgage tool serves as more than just a calculator — it’s a comprehensive home financing planner and loan affordability guide. Here’s how it helps:

  • Estimates how much equity can be turned into cash
  • Explores multiple payout options based on your goals
  • Displays closing costs and fees upfront
  • Shows a detailed payment schedule and projected balances
  • Supports informed decisions about home equity use during retirement

Frequently Asked Questions (FAQ)

Who qualifies for a reverse mortgage?

Anyone aged 62 or older who owns their home (or has a low existing mortgage balance) may qualify.

Will I lose my home with a reverse mortgage?

No, as long as you live in the home, keep up with property taxes, insurance, and maintenance, you retain ownership.

How is the loan amount calculated?

The loan amount depends on your age, home value, current interest rates, and the Principal Limit Factor.

What are the payout options?

You can receive funds as a lump sum, monthly payments, or a line of credit. Some may combine options depending on goals.

What happens to the loan when I move or pass away?

The loan becomes due. Your heirs can sell the home to repay it or refinance to keep the property.

Is the Reverse Mortgage Calculator accurate?

It provides a strong estimate, but actual loan offers may vary. Use it as a helpful mortgage planning and loan interest calculator tool before speaking with a lender.

Related Tools You Might Find Helpful

  • Mortgage Payment Tool: Estimate monthly payments for traditional mortgages.
  • Amortization Calculator: See how loan balances reduce over time with an amortization schedule.
  • Borrowing Power Calculator: Find out how much you may be able to borrow.
  • Refinance Calculator: Explore potential savings from refinancing your home loan.
  • Down Payment Calculator: Estimate how much you’ll need to save for a new home.

Whether you're exploring a reverse mortgage or comparing other options with a home loan calculator or mortgage affordability tool, this calculator gives you clear, useful home financing insights in minutes.