Reverse Mortgage Calculator
Estimate how much you could receive from a reverse mortgage based on your home's value, your age, and current interest rates.
Reverse mortgage payout estimation calculates how much a homeowner aged 62 or older can receive from a Home Equity Conversion Mortgage (HECM) — the FHA-insured form of reverse mortgage — based on home value, age, and current interest rates.
Key formula — Principal Limit: Principal Limit = Home Value × Principal Limit Factor (PLF)
Where:
- Home Value = the lesser of the appraised value or the FHA lending limit ($1,149,825 in 2024)
- PLF = a factor determined by the youngest borrower’s age and the Expected Interest Rate (EIR)
How the PLF works: Older borrowers receive higher PLF percentages — they have shorter life expectancy, so the loan balance is less likely to exceed home value. Higher interest rates produce lower PLF values.
Approximate PLF by age (at 6% EIR, 2024):
| Age | PLF (% of home value accessible) |
|---|---|
| 62 | ~40% |
| 65 | ~43% |
| 70 | ~49% |
| 75 | ~55% |
| 80 | ~61% |
| 85 | ~67% |
| 90+ | ~72% |
Worked example: Homeowner age: 74 | Home value: $420,000 | Existing mortgage: $80,000 | PLF: 54%
Gross principal limit = $420,000 × 0.54 = $226,800 Less: existing mortgage payoff = $80,000 Less: closing costs (est.) = $12,000 Net proceeds available: ~$134,800
This can be taken as a lump sum, monthly payments, a line of credit, or a combination.
Important facts:
- No monthly payments required; the loan is repaid when the borrower moves, sells, or dies
- Interest compounds on the outstanding balance — the loan balance grows over time
- The home must remain your primary residence
- Mandatory HUD counseling is required before application
- Non-recourse loan: heirs never owe more than the home’s sale value
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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