Reverse Mortgage Calculator (HECM Balance & Costs)

With a reverse mortgage you receive money from your home equity and make no monthly payments; interest and mortgage insurance are added to the balance instead. This calculator projects that balance for a Home Equity Conversion Mortgage (HECM), the FHA-insured kind most US reverse mortgages are, and shows how much equity may remain. It also works out the 2026 upfront mortgage insurance and the HUD cap on the origination fee.

How to use this tool

1. Enter the home value and the money you take at closing, including any mortgage being paid off.
2. Add a monthly draw if you plan to take regular payments.
3. Choose whether upfront costs are added to the loan, and adjust the fee estimates.
4. Enter the interest rate, annual MIP (0.5% for HECMs) and a home value growth rate.
5. Pick how many years to project and read the balance, equity and yearly table.

Formula

Balance each month = balance × (1 + (rate + MIP) ÷ 1200) + draw

Upfront MIP = 2% × min(home value, $1,249,125)

Interest and the 0.5% annual MIP compound monthly on the full balance. The origination fee cap is 2% of the first $200,000 of the maximum claim amount plus 1% of the rest, with a $2,500 minimum and a $6,000 maximum. Equity is the projected home value minus the projected balance.

Example

On a $450,000 home, taking $150,000 at closing with the upfront MIP ($9,000), the capped origination fee ($6,000) and $3,000 of other costs financed gives a starting balance of $168,000. At 6.75% plus 0.5% MIP, the balance grows to about $496,800 after 15 years. If the home gains 3% a year it would be worth about $701,100, leaving roughly $204,300 of equity.