Reverse Mortgage (HECM) Calculator
See how much you can access from your home equity through an FHA-insured HECM. Compare all four HUD payment plans — lump sum, line of credit, tenure, and term — at a glance.
What is a HECM?
HECM stands for Home Equity Conversion Mortgage — the FHA-insured reverse mortgage program managed by HUD. It lets homeowners aged 62 or older convert part of their home equity into cash without selling the home or making monthly mortgage payments. The loan is repaid when the borrower moves out, sells the home, or passes away.
How much can you receive?
Your principal limit — the total amount you can borrow — is calculated as:
Principal Limit = min(Home Value, $1,209,750) × PLF
The Principal Limit Factor (PLF) is published by HUD and depends on the youngest borrower's age and the expected interest rate. Older borrowers and lower rates produce higher PLFs, meaning more available cash.
Out of that principal limit, you also pay closing costs (rolled into the loan): a 2% upfront mortgage insurance premium (MIP), an origination fee (capped at $6,000), and any existing mortgage that must be paid off at closing. The remainder is what you can actually access.
The four HUD payment plans
- Lump sum — All available proceeds at closing. Available with fixed-rate HECMs only. Best for one-time large expenses or paying off a large existing mortgage.
- Line of credit — Draw funds as needed. The unused portion grows over time at the note rate plus 0.5% MIP — a powerful feature unique to HECM LOCs.
- Tenure — Equal monthly payments for as long as at least one borrower lives in the home as a primary residence.
- Term — Equal monthly payments for a fixed number of years. Higher monthly payment than tenure but stops at the term end.
Mandatory HUD counseling
All HECM borrowers must complete counseling with a HUD-approved housing counselor before closing. This is a federal requirement designed to protect borrowers from predatory products. Find a counselor at hud.gov.
Important things to know
- You retain title to your home and remain responsible for property taxes, homeowners insurance, and home maintenance.
- The loan balance grows over time (interest accrues, and MIP compounds), so your equity shrinks. Heirs typically have 6 months to repay the loan or sell the home.
- HECM is non-recourse: you (or your heirs) will never owe more than the home is worth at sale.
- For homes valued above $1,209,750, consider a proprietary "jumbo reverse" mortgage instead.
Disclaimer: This calculator provides estimates only. Actual HECM proceeds use the exact HUD Principal Limit Factor table for your age × expected rate combination, and depend on lender margins, county loan limits, and current 10-year LIBOR swap rate. Counseling, appraisal, title insurance, and other closing costs apply. This is not financial advice.