Reverse Mortgage Calculator
A reverse mortgage (HECM) lets homeowners 62 and older convert equity into cash with no monthly payments, but how much you can borrow is set by HUD’s Principal Limit Factor tables: your age and the expected interest rate decide the percentage of your home’s value available. This tool uses the actual HUD PLF tables (interpolated for your exact age and rate), subtracts mandatory obligations, and shows lump-sum, tenure, term, and line-of-credit payouts.
Estimate only: PLF from HUD’s published HECM tables (effective Oct 2017), interpolated. Actual HECM terms come from your lender; HUD-approved counseling is required before closing. You still owe property taxes, insurance, and upkeep.
Worked example, checked against this exact tool
Age 65, $400,000 home, 6.5% expected rate, no existing mortgage, $15,000 upfront costs, tenure payouts: max claim amount = $400,000; HUD PLF (interpolated) = 0.356; principal limit = $142,200; net after $15,000 obligations = $127,200; tenure monthly payment = $812.63. Enter the same inputs and the tool reproduces every figure.
What the Principal Limit Factor is
The PLF is the percentage of your home’s claimable value HUD lets you borrow, read from tables by the youngest borrower’s age and the loan’s expected rate. Older borrowers and lower rates get higher factors: at 6%, a 62-year-old gets 0.357 while an 80-year-old gets 0.488. The previous version of this page used a made-up formula that understated the factor by up to a third; this version reads HUD’s published tables directly.
The 60% first-year rule
On adjustable-rate HECMs, HUD caps first-year disbursements at the greater of 60% of the principal limit or mandatory obligations plus 10% of the limit. The tool reports this cap for lump-sum and line-of-credit choices so the headline number does not overpromise what is available at closing.
Tenure vs term vs line of credit
Tenure pays monthly for as long as you live in the home; term pays higher monthly amounts for a fixed number of years; a line of credit grows over time at the loan’s rate plus MIP, which makes it the most flexible option if you may not need cash immediately. Lump sum is simplest but accrues interest on the full amount from day one.
Costs that reduce your cash
Mandatory obligations come off the top: any existing mortgage must be paid off, plus origination fees, the upfront mortgage insurance premium (2% of the claim amount), and closing costs. You also keep paying property taxes, homeowner’s insurance, and maintenance: fall behind and the loan can be called due.
What competing calculators miss
Most reverse-mortgage tools hide their PLF math or use rough rules of thumb, so two sites give wildly different answers for the same inputs. This page’s edge: the actual HUD PLF tables with interpolation, the first-year disbursement cap, and all four payout modes with the balance-growth math shown, each labeled as an estimate rather than a quote.
Frequently asked questions
How is the principal limit calculated?
Principal limit = max claim amount × PLF, where the claim amount is the lesser of home value and the FHA limit, and the PLF comes from HUD’s tables by age and expected rate.
Who qualifies for a reverse mortgage?
Homeowners 62 or older (youngest borrower sets the PLF) living in the home as a primary residence, with HUD-approved counseling completed before closing.
Do I make monthly payments?
No. Interest accrues and the balance grows; repayment happens when you sell, move out permanently, or pass away.
What is the initial disbursement limit?
On adjustable-rate HECMs: the greater of 60% of the principal limit or mandatory obligations plus 10% of the limit, in the first year.
Can I lose my home?
Yes, if you stop paying property taxes or insurance, let the home fall into disrepair, or move out permanently. The loan becomes due.
What happens to my heirs?
They can repay the loan (or 95% of appraised value, if less) and keep the home, or sell it. HECMs are non-recourse: the debt can never exceed the home’s sale value.
How does the line of credit grow?
The unused portion grows at the loan’s interest rate plus the annual MIP rate, compounded monthly: available credit increases even as you draw on it.
Are proceeds taxable?
Generally no: the IRS treats reverse-mortgage proceeds as loan advances, not income. Confirm with a tax professional.
What does tenure pay monthly?
Roughly the net principal limit amortized to age 100 at the expected rate plus MIP: the tool shows the figure for your inputs.
Fixed or adjustable rate?
Fixed-rate HECMs require a lump-sum draw; adjustable rates allow tenure, term, and line-of-credit options with the first-year cap above.