Reverse Mortgage Calculator United States

How the estimate is built

A reverse mortgage lets an older homeowner turn part of their home equity into cash while living in the house, without a required monthly mortgage payment. This calculator estimates the funds an FHA Home Equity Conversion Mortgage (HECM) could make available. Enter your home value, your existing mortgage balance, and the principal limit factor from a lender quote or an estimate for your age and rate. If your home is in a high-cost area, check the HECM lending limit in the advanced options; it defaults to the current $1,249,125 figure.

The calculation has three steps. First, the program counts your home value but never more than the FHA HECM lending limit, which for 2026 is $1,249,125; a home worth more is treated as if it were worth exactly the limit. Second, the capped value is multiplied by the principal limit factor to give the principal limit, the total the loan can advance over its life. Third, any existing mortgage or lien is subtracted, because a reverse mortgage must sit in first position and those balances are cleared at closing. What remains is your estimated available proceeds. The tool shows the home value used after the cap, the principal limit, and the proceeds.

The principal limit factor

The principal limit factor, or PLF, has more effect on how much you can borrow than any other input. It is a percentage, say 45 or 50 percent, read from HUD tables using the age of the youngest borrower and the expected interest rate when you lock in. The older the youngest borrower, the higher the factor, because the loan is expected to run for fewer years. The lower the expected rate, the higher the factor, because less interest is projected to accrue. A 62-year-old at a high rate might see a factor in the low 30s, while a 75-year-old at a low rate could see one well above 50 percent. The factor comes from a quote, so you enter it directly and can compare scenarios.

The lending limit

Most homes are worth less than $1,249,125, so the full value is used. In higher-cost markets the cap applies: if your home is worth $1.5 million, the HECM still considers only the first $1,249,125, and the equity above the limit adds nothing to your proceeds. Owners of very expensive homes sometimes look at proprietary or jumbo reverse mortgages, private products outside the FHA program, to reach equity above the HECM ceiling. This calculator models the FHA HECM, so it applies the cap.

Existing mortgage payoff

A reverse mortgage cannot share the lien position with another loan. If you still owe money on a regular mortgage or a home-equity line, that balance is paid off first, out of the reverse-mortgage proceeds. Two people with identical homes and principal limits will receive very different amounts if one owns free and clear and the other still owes $100,000. When the existing balance is close to the principal limit, little cash is left; when it is larger, the deal may not work without bringing money to closing.

A worked example

Suppose your home is worth $400,000, you still owe $50,000 on your current mortgage, and your lender quotes a principal limit factor of 50 percent. The home value is below the lending limit, so the full $400,000 is used. Multiplying by 50 percent gives a principal limit of $200,000. Subtracting the $50,000 mortgage paid off at closing leaves about $150,000 in available proceeds. A higher factor raises the proceeds; a larger existing mortgage lowers them.

Assumptions and limitations

This is a planning estimate, not a loan offer. It shows the gross principal limit and the proceeds after an existing mortgage, but it does not subtract closing costs, the initial mortgage insurance premium, origination fees, or any servicing set-aside a lender may require, all of which reduce the cash you receive. It does not project how the loan balance grows, model a line-of-credit growth feature, or account for a non-borrowing spouse. It assumes you meet HECM eligibility rules, including the minimum age and a financial assessment. The principal limit factor and the lending limit change with rates, age and HUD policy, so confirm figures with an FHA-approved lender and a HUD-approved housing counselor before deciding.

About This Reverse Mortgage Calculator

Use this reverse mortgage calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.