Estimate HECM reverse mortgage proceeds for homeowners 62 and older based on home value, age, and interest rate.
$
$
Enter 0 if your home is paid off. An existing mortgage must be paid off at closing from loan proceeds.
The minimum age for a HECM reverse mortgage is 62.
Current 10-year CMT + lender margin. Typically 5.5-8% in 2024. Higher rates reduce your principal limit.
Estimated Net Available Proceeds
$0
Maximum Claim Amount
$0
Lesser of home value or $1,209,750 FHA limit
Principal Limit
$0
Gross borrowing limit
Est. Closing Costs
$0
MIP + origination + title
Mortgage Payoff Required
$0
Payout Options
This tool provides estimates for educational purposes only. Not financial advice. Neither MayoCalc nor Cook Media Systems assumes any liability for decisions made using this tool. Always consult a qualified financial advisor. See our Disclaimer and Terms of Service.
What Is a HECM Reverse Mortgage?
A Home Equity Conversion Mortgage (HECM) lets homeowners 62 and older borrow against home equity without monthly payments. The loan becomes due when the last borrower dies, sells, or permanently moves out. The balance grows as interest accrues. It is federally insured by FHA and requires HUD-approved counseling before closing.
How the Principal Limit Is Calculated
HUD uses Principal Limit Factor (PLF) tables based on the youngest borrower's age and the expected interest rate. A higher age and lower rate both increase the PLF - meaning older borrowers in low-rate environments get the most favorable terms. The 2024 FHA lending limit caps the Maximum Claim Amount at $1,209,750 regardless of home value above that threshold.
Do I still own my home with a reverse mortgage?
Yes - you retain title and ownership throughout the loan. You remain responsible for property taxes, homeowners insurance, and maintenance. Failing to pay taxes or insurance is the most common cause of reverse mortgage default. As long as you meet these obligations and the home is your primary residence, the loan cannot be called due.
What happens when I die or move out?
The loan becomes due. Your heirs can sell the home and repay the loan, repay from other assets and keep the home, or let the lender foreclose. FHA insurance covers any shortfall if the loan balance exceeds home value - heirs are never personally liable for the difference. Heirs typically have 6-12 months to decide with possible extensions.
Is HUD counseling required?
Yes, federal law requires all HECM borrowers to complete a session with a HUD-approved housing counselor before the loan is processed. This session covers alternatives, how the loan affects your estate, and your ongoing obligations. The fee is typically $125-$200 and can often be paid from loan proceeds.
What are the downsides of a reverse mortgage?
High upfront costs (2% MIP + origination + closing = $10,000-$20,000 on a typical loan), balance growing over time reducing equity, requirement to maintain the home as primary residence, and reduced inheritance for heirs. Reverse mortgages are sometimes aggressively marketed to seniors who have better options - always get independent financial advice first.