Principal limit
Principal limit = home value × age factor × rate factor. The age factor increases from 0.36 at age 62 to 0.60 at age 95+; the rate factor adjusts for current interest rates around a 7% baseline.
Finance
About Reverse Mortgage Calculator
See how age, home value, mortgage balance, and interest rates shape your estimated principal limit, lump sum, monthly payout, and standby line of credit.
About this calculator
What this does
Estimates how much a homeowner age 62+ could access through a reverse mortgage, including the principal limit, lump sum available after paying off an existing mortgage, monthly tenure payout, and standby line of credit. A 20-year projection chart shows how home equity and loan balance may change over time under assumed appreciation and interest rates.
Who it is for
Homeowners aged 62 or older who want to understand their reverse mortgage options without sharing personal information. Also useful for family members helping aging parents evaluate whether a reverse mortgage makes sense as part of a broader retirement plan.
How it works
The calculator applies an age-based factor (higher for older borrowers) and a rate-based factor (adjusting for current interest rates) to the home value to estimate the principal limit. It subtracts any existing mortgage balance to find the lump sum available. The monthly tenure payout divides that lump sum by expected tenure months, and the line of credit shows the unused amount growing at the assumed rate over 20 years.
Limitations
This is an educational estimate, not an FHA underwriting result. Actual reverse mortgage limits depend on FHA lending limits, mandatory counseling, property type, occupancy status, and lender-specific fees. The projection assumes constant appreciation and interest rates, which may not reflect actual market conditions.
Formula
Age factor
Age factor = clamp(0.36 + (age − 62) × 0.0085, 0.36, 0.60). Older borrowers qualify for a larger share of their home equity because the expected remaining loan term is shorter.
Lump sum available
Lump sum = max(principal limit − existing mortgage balance, 0). This is the cash available after paying off any current mortgage from the reverse mortgage proceeds at closing.
Monthly tenure payout
Monthly payout = lump sum / tenure months. Tenure months = clamp((92 − age) × 12, 120, 360). The payout spreads the available cash across the borrower's expected remaining years for steady income.
How it works
Step 1
Enter your age
Set the age of the youngest homeowner (minimum 62). The age factor directly affects how much equity you can access—older borrowers qualify for a higher percentage of their home value.
Step 2
Set your home value
Enter your current home value or a conservative estimate. This is the starting point for all calculations and should reflect a realistic current market value, not a hoped-for future value.
Step 3
Enter existing mortgage balance
Add any remaining mortgage balance. The calculator subtracts this from the principal limit to show the net cash you would have available after paying off your current loan.
Step 4
Review the estimate
Read the estimated principal limit, lump sum available, monthly tenure payout, and standby line of credit. The projection chart shows how equity and loan balance may change over a 20-year horizon.
Step 5
Adjust assumptions
Change the interest rate or age to see how different scenarios affect your available funds. Higher rates reduce the limit; older ages increase it. Testing multiple scenarios helps you understand the range of possibilities.
Step 6
Prepare for a real quote
Use the optional form to prepare notes for a licensed advisor. No personal information is required to use the calculator, and the form data stays local to your browser in v1.
Reference ranges
Principal limit percentage
Typical principal limits range from 36% to 60% of home value depending on borrower age. A 65-year-old might access approximately 39%; an 85-year-old might access approximately 56%.
Interest rate sensitivity
A 1% change in the expected interest rate shifts the principal limit by roughly 3% in the opposite direction. Lower rates increase available funds; higher rates reduce them.
Lump sum vs. tenure tradeoff
Taking the full lump sum maximizes immediate cash but eliminates future line of credit growth. Opting for monthly tenure provides steady income spread across years but caps total access if needs change.
Equity erosion timeline
At a 7% loan growth rate and 4% home appreciation, remaining equity declines steadily and may approach zero within 20–30 years depending on the initial draw. The chart visualizes this trajectory.