Free Reverse Mortgage Calculator: Estimate HECM Principal Limit Online
Use our free reverse mortgage calculator to estimate your HECM (Home Equity Conversion Mortgage) principal limit. Simply enter your home value, age, and current mortgage balance to get an instant estimate of your potential reverse mortgage amount. This tool helps seniors understand their home equity borrowing options for retirement planning.
Reverse Mortgage Calculator
Estimated HECM Principal Limit
Based on:
Principal Limit Factor (PLF):
Age Adjustment:
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How to Use the Reverse Mortgage Calculator Effectively
This reverse mortgage calculator helps you estimate your Home Equity Conversion Mortgage (HECM) principal limit by factoring in your home value, your age, and any existing mortgage balance. Follow these steps to get an accurate estimate:
Home Value: Enter your home’s current market value. For example, you could input 650000 or 900000 as the value of your property. Avoid using commas or symbols.
Borrower’s Age: Input the age of the youngest borrower or eligible spouse. You must be at least 62 years old. Sample ages include 74 or 81.
Existing Mortgage Balance: If you have an outstanding mortgage, enter the remaining balance here. This field is optional; you can leave it blank if you own your home outright. Examples of mortgage balances to enter are 120000 or 275000.
What Is the Reverse Mortgage Calculator and Why Use It?
A reverse mortgage lets homeowners aged 62 and older convert home equity into cash without selling their home or making monthly loan payments. This calculator estimates your maximum borrowing limit, known as the HECM principal limit, helping you understand your financial options clearly.
Using this online reverse mortgage estimator provides several benefits:
Financial Planning: See how much cash you can access to support your retirement needs.
Quick Estimates: Get an immediate calculation tailored to your age and property value.
Informed Decisions: Evaluate if a reverse mortgage suits your financial goals and situation.
Scenario Analysis: Compare different ages or home values to explore how your borrowing limit changes.
How the Reverse Mortgage Principal Limit Is Calculated
The calculator determines your available funds using this formula:
The PLF is a percentage that varies by age and affects how much of your home value counts towards your borrowing limit.
Ages 62–69: 50%
Ages 70–74: 55%
Ages 75–79: 60%
Ages 80–84: 65%
Ages 85 and older: 70%
Age Adjustment Explained
For every year older than 62, the calculator adds $1,000 to your borrowing limit to reflect increased eligibility. For example, a 78-year-old borrower gets an added amount of:
$$
(78 – 62) \times 1,000 = 16,000
$$
Example Calculation Using the Reverse Mortgage Calculator
The funds can help cover healthcare costs without selling the home.
Frequently Asked Questions About Reverse Mortgages
What is a reverse mortgage?
A reverse mortgage allows homeowners aged 62 or older to borrow against their home equity without monthly payments. The loan is repaid when you sell the home, move out permanently, or pass away.
How does the age adjustment increase the borrowing limit?
The reverse mortgage calculator adds $1,000 for each year over 62, giving older borrowers access to higher loan amounts.
Can both spouses apply for a reverse mortgage?
Yes. The calculation uses the age of the youngest borrower or eligible non-borrowing spouse to determine your principal limit.
What happens to my existing mortgage when I get a reverse mortgage?
Your reverse mortgage must pay off any remaining mortgage balance before you receive funds, which is why the existing mortgage reduces the total amount you can borrow.
How can I increase my reverse mortgage principal limit?
Wait until you’re older to apply.
Pay down or eliminate your existing mortgage.
Make home improvements to boost your property’s value.
Do I need to make monthly payments on a reverse mortgage?
No. Reverse mortgages don’t require monthly loan payments, but you must keep up with property taxes, homeowner’s insurance, and maintenance.
Can I choose how to receive the reverse mortgage funds?
Yes, funds are often available as a lump sum, monthly payments, a line of credit, or a combination of these options.
Does my home’s market value impact the principal limit?
Yes. Your home value directly affects the borrowing limit through the Principal Limit Factor, with higher values allowing access to more funds.
Important Disclaimer
The calculations, results, and content provided by our tools are not guaranteed to be accurate, complete, or reliable. Users are responsible for verifying and interpreting the results. Our content and tools may contain errors, biases, or inconsistencies. We reserve the right to save inputs and outputs from our tools for the purposes of error debugging, bias identification, and performance improvement. External companies providing AI models used in our tools may also save and process data in accordance with their own policies. By using our tools, you consent to this data collection and processing. We reserve the right to limit the usage of our tools based on current usability factors. By using our tools, you acknowledge that you have read, understood, and agreed to this disclaimer. You accept the inherent risks and limitations associated with the use of our tools and services.
