Reverse Mortgage Payout Calculator
Calculate your payout options: lump sum, line of credit, or monthly payments
How Reverse Mortgage Payouts Work
Principal Limit: The maximum amount you can borrow, based on your age, home value, and interest rates. Older borrowers qualify for higher percentages (typically 40-75% of home value).
Payout Options:
- Lump Sum: Receive a single payment. Fixed-rate loans only. Limited to 60% of principal limit in year one.
- Line of Credit: Draw funds as needed. Unused credit grows at the same rate as loan interest. Most flexible option.
- Monthly Payments (Tenure): Receive equal monthly payments for as long as you live in the home.
- Term Payments: Receive monthly payments for a fixed period (e.g., 10 years).
- Modified Plans: Combine options (e.g., partial lump sum + line of credit).
Requirements: Must be 62+, live in home as primary residence, maintain property taxes and insurance, keep home in good condition.
HECM vs. Proprietary: HECM (Home Equity Conversion Mortgage) is FHA-insured with a lending limit ($1,089,300 in 2024). Proprietary reverse mortgages are for higher-value homes but may have higher rates and fees.
📐 How We Calculate This
We use the standard amortization formula: M = P[r(1+r)^n] / [(1+r)^n – 1], where P is the principal, r is the monthly interest rate, and n is the total number of payments. Property taxes and insurance are estimated based on national and state-level averages from the U.S. Census Bureau.
Interest rates shown reflect current market ranges from Freddie Mac's Primary Mortgage Market Survey. Actual rates depend on credit score, down payment, loan type, and lender.
📚 Sources & References
Frequently Asked Questions
Do I still own my home with a reverse mortgage?
Yes. You retain full ownership and can leave it to your heirs. The loan becomes due when you permanently move out or pass away.
Will I owe more than my home is worth?
No. HECM loans are non-recourse, meaning you or your heirs will never owe more than the home's value when sold.
How does the line of credit grow?
Unused credit grows annually at the same rate as the loan's interest rate plus MIP (typically 0.5%). This growth is guaranteed regardless of home value changes.
What are the main costs?
Origination fee (up to $6,000 for HECM), mortgage insurance premium (2% upfront + 0.5% annual), appraisal (~$500), and typical closing costs (~$2,500-$4,000).