Reverse mortgage calculator

$
$
%
%/yr
yr
Equity left after 15 years
$115,142

a house worth $643,744 against a loan grown to $528,603

Loan costs$364,603
They meet at19 yr 5 mo
Rate + insurance7.50%
$430k$860k$1.3m0 yr10 yr20 yr30 yrThey meet at 19 yr 5 mothe housethe loan$430k$860k$1.3m0 yr15 yr30 yrThey meet at 19 yr 5 mo

The loan balance against the value of the house. The solid line takes no payments and compounds at the rate plus insurance; the dashed line is the house. Where they meet, the equity is gone.

Drawing $164,000 against a $410,700 home at 7.00% grows to $528,603 after 15 years, because a reverse mortgage takes no payments and the balance carries the 0.50% annual insurance on top of the rate. The house reaches $643,744 over the same period, leaving $115,142 of equity. The balance passes the value of the house at 19 yr 5 mo.

How to use this, and the parts people get wrong
  • The draw is the cash taken now. Nothing is repaid monthly, so interest compounds on a balance that only grows.
  • The crossing year is when the loan balance passes the value of the house - after it, the inheritance from the house is zero.
  • The loan is non-recourse: whatever the balance says, heirs never owe more than the house itself.

What the cash actually costs

The $164,000 you draw carries $8,214 of upfront insurance into the balance on day one, then compounds at 7.50% with nothing paid back. By year 15 it stands at $528,603 against a house worth $643,744.

$364,603the loan costs beyond the cash drawn
$115,142left in the house at your horizon
19 yr 5 mountil the balance meets the value of the house

Staying longer, and shorter

The same house, draw and rate, at every horizon.

YearsOwedHouse worthEquity left
5$250,278$477,076$226,798
10$363,727$554,180$190,452
15$528,603$643,744$115,142
20$768,215$747,784$0
25$1,116,443$868,639$0
30$1,622,520$1,009,025$0

Questions people ask

How much does a reverse mortgage cost?
On these figures $164,000 drawn becomes $528,603 owed after 15 years, so the loan costs $364,603 beyond the cash received. Nothing is paid monthly, which is the point of the product and also why the balance compounds the way it does.
When does the loan balance pass the value of the house?
At 19 yr 5 mo on these figures. The balance grows at 7.50% a year, the rate plus the annual insurance premium, while the house grows at 3.0%. Two rates that far apart cross once, and this page solves for the date rather than illustrating it.
What happens if the loan grows bigger than the house?
Nothing is owed beyond the house. A HECM is non-recourse: when the loan is settled the lender takes the property or its sale price, and FHA insurance covers any shortfall. That insurance is what the 0.50% annual premium buys. The crossing is the date the inheritance reaches zero, not the date a debt lands on the family.
How much can I actually borrow?
It is HUD's Principal Limit Factor multiplied by the lesser of your home's value and the 2026 maximum claim amount of $1,249,125. At one point HUD publishes, a borrower of 75 with an expected rate of 7.00%, the factor is 0.400, which on this $410,700 home is $164,000. The full table runs to every age and every eighth of a percent, and a lender quotes your own figure free, so this page takes the amount as an input rather than interpolating a regulated table between its published points.
What are the insurance premiums?
2.00% of the maximum claim amount upfront, $8,214 here, financed into the balance rather than paid at closing. Then 0.50% of the balance each year, added to the balance. Both were set by Mortgagee Letter 2017-12 and are counted in every figure on this page.
Does the house need to appreciate to make this work?
It needs to appreciate faster than the loan compounds, which is a high bar: 7.50% a year here. Below that the equity falls every year, and how much is left depends on how long you stay rather than on the housing market.

Method and sources

  • HUD Mortgagee Letter 2025-222026 HECM maximum claim amount, $1,249,125, effective 1 January 2026
  • HUD Mortgagee Letter 2017-12Mortgage insurance premiums: 2.00% upfront on the maximum claim amount, 0.50% annually on the balance, effective 2 October 2017
  • HUD FY2024 Actuarial Review, Exhibit I-2Principal Limit Factors at the published grid points used above
  • Census Bureau and HUD, via FRED series MSPUSMedian sale price of houses sold, April 2026, which this page opens with
The calculation

The upfront premium is charged on the lesser of the home's value and the 2026 maximum claim amount, then financed, so the balance starts above the cash drawn. That balance compounds monthly at the note rate plus the annual insurance premium, with nothing repaid. The house compounds monthly at the appreciation rate. Equity is the difference at your horizon, and the crossing is solved directly from the two growth rates rather than found by stepping through the months.

What these figures do not cover
  • Servicing fees, origination fees and closing costs beyond the upfront premium are not included; add them to the amount drawn to count them.
  • A fixed rate is assumed. An adjustable HECM moves with its index, and the expected rate that sets the borrowing limit is a separate figure again.
  • How much you can borrow is not computed here. It is a lookup in HUD's Principal Limit Factor table, and a lender quotes it free.
  • Appreciation is an input, not a forecast. It is there so you can see what the answer needs to be true, not because this page knows.

Last updated August 2026.

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