HECM Calculator / Reverse Mortgage Calculator
How much can you get from a reverse mortgage?
Welcome! You’ve found one of the best (if not the best) reverse mortgage calculators online. Our calculator is updated and current for 2023 based on the latest FHA principal limit and principal limit factor tables. You’ll be able to quickly and easily calculate multiple payout options.
This calculator is for the FHA-insured home equity conversion mortgage, or HECM. The HECM is the most common reverse mortgage product on the market today. If you know somebody who recently got a reverse mortgage, it’s likely they got a HECM.
You can use this FHA reverse mortgage calculator at no cost to you. Almost all reverse mortgage calculators online (at least the decent ones, anyway) require personal information, but ours does not. We hope you find it helpful as you decide if a reverse mortgage is right for you.
How to Use This Reverse Mortgage Calculator
A HECM, or home equity conversion mortgage, is an FHA-insured reverse mortgage program that enables homeowners 62 and older to borrow against home equity without a mortgage payment.
Congress created the HECM (often pronounced heck-um by industry professionals) as part of the Housing and Community Development Act of 1987. The Act gives the Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) authority to oversee, regulate, and insure the HECM.
The HECM loan is by far the most popular reverse mortgage product in the United States.
We think you’ll find this calculator for reverse mortgages to be fast and easy to use. Feel free to scan through the instructions below. You’ll learn about what to fill in (and why) as well as key insights about the results once the calculations are complete.
Step 1 – Enter Your Age and Home Value
The proceeds are calculated as a percentage of your home’s value based on the age of the youngest borrower (or non-borrowing spouse). Enter the age of the youngest borrower (or non-borrowing spouse) and your home’s estimated market value in the fields on this page.
- Age (of youngest borrower) – Enter the age of the youngest borrower (or non-borrowing spouse).
- Estimated home value – Enter the estimated market value of your home.
Click the Next button to continue to Step 2.
Step 2 – Enter Mortgage Balances and Payments
A HECM reverse mortgage can eliminate existing mortgage payments, which can save you thousands of dollars per year. That’s money that can be used for other things, such as home improvements, travel, etc. Enter the total mortgage balances owed, total mortgage payments, and the years left on your mortgage on this page of the reverse mortgage calculator.
- Total mortgage balance(s) owed – Enter the total principal balance of all liens and mortgages against your home. Don’t forget to include any balances for home equity lines of credit (HELOC).
- Total principal & interest payment(s) – Enter the total principal and interest payments of all mortgages and liens against your home. Do not include any part of your payment that is going to taxes, insurance, escrows, etc. Include only principal and interest.
- Years left on mortgage – Enter the number of years left on your mortgage. If you’re not completely sure, just estimate. This will enable the reverse mortgage amortization calculator to give you accurate mortgage payment savings projections.
If your home is free and clear, enter zeros in these fields. Click the Next button to continue to Step 3.
Step 3 – Select Your State
Select the state where the property is located. Per HUD/FHA requirements, a HECM reverse mortgage is only for a primary residence that you live in for the majority of the year. No second homes or rental properties.
- Select your state – Select the state where the property is located.
Click the Next button to continue to Step 4.
Step 4 – Select a Payout Option
Our HECM calculator offers the ability to calculate multiple payout options. Most HECM reverse mortgage calculators online only calculate lump sum. Select which payout option you would like to calculate using the drop down box on this page. You can always select a different option later and run the numbers again.
- Select a payout option – The choices are as follows:
- Lump Sum/LOC – This payout option offers a lump sum payout at closing and a line of credit later.
- LOC Only – Line of credit only.
- Lifetime income – Also known as a tenure income plan. This plan offers a monthly paycheck with a lifetime guarantee.
- 20-Year Income – Term plan with guaranteed income for 20 years.
- 15-Year Income – Term plan with guaranteed income for 15 years.
- 10-Year Income – Term plan with guaranteed income for 10 years.
Click the Next button to continue to Step 5.
Step 5 – Confirm and Calculate
This page displays the information you’ve already entered. Confirm the information you entered is accurate, then click the Calculate button. The calculation results will display on the next page.
As we promised, no personal information was required!
The top of the Calculation Results page displays results for the two primary HECM products: the variable-rate HECM and the fixed-rate HECM. You can switch between the two products using the drop down box near the top of the page.
Near the bottom of the page, you’ll see a breakdown of benefits and figures. This area displays monthly savings (such as if you’re paying off an existing mortgage), monthly tenure/term income, and any lump sum and line of credit payouts.
You’ll notice that many of the key terms on this page are hyperlinked. The links open in a new browser tab or window and provide additional detail about a given topic.
If you’d like to recalculate using different criteria or payout options, simply click the Back button to return to Step 5.
Reverse Mortgage for Purchase Calculator
Not many people know that you can buy a house with a reverse mortgage. You bring in your down payment, the bank finances the rest with no monthly mortgage payment. All you have to do is live in the home and pay the required property charges. If you’d like to calculate a possible down payment, check out our Purchase Reverse Mortgage Calculator.