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