Reverse Mortgage Line of Credit Calculator
Estimate your HECM reverse mortgage line of credit based on 2026 FHA principal limit factors. See immediate available credit and how the LOC grows over time. For homeowners age 62 and older.
Year-by-Year Growth
What Is a HECM Line of Credit?
A Home Equity Conversion Mortgage (HECM) line of credit is a federally insured reverse mortgage that lets homeowners age 62 and older borrow against their home equity without monthly payments. The unique feature: any unused portion of your line of credit grows over time at the same rate as the loan interest rate plus 1.25% in mortgage insurance premium. This guaranteed growth is unlike any other home equity product (source: hud.gov, FHA HECM program).
How the LOC Growth Rate Works
If you take a $200,000 HECM line and never use it, the available credit grows by the current loan rate plus 0.5% MIP each year — roughly 7.5% to 9% annually in 2026. After 10 years, your unused $200,000 LOC could grow to over $400,000 in available borrowing capacity. This makes a HECM LOC valuable as a "standby" emergency fund or future income source. Crucially, the growth is on the credit line itself, not on home equity, so it continues even if home values fall (source: National Reverse Mortgage Lenders Association).
HECM 2026 Lending Limit and Principal Limit Factor
FHA's 2026 maximum claim amount is $1,209,750 — home values above that are still eligible but the calculation caps at this figure. The principal limit factor (PLF) is the percentage of your home value (or max claim, whichever is less) you can borrow. PLFs increase with age: at 62 you might borrow ~38%, at 70 ~48%, at 80 ~58%, at 90 ~70%. Lower interest rates also boost your PLF. Existing mortgage debt must be paid from the proceeds before any cash is available to you.
HECM LOC vs HELOC vs Cash-Out Refi
A traditional HELOC requires monthly payments and credit approval, can be frozen or reduced by the lender, and has variable rates. A cash-out refinance gives a one-time lump sum but requires monthly payments. The HECM LOC requires no monthly payments (interest accrues onto the balance), cannot be frozen by the lender, and the unused portion grows. The trade-off: higher upfront fees (origination, MIP, counseling) and the loan eventually must be repaid when you sell, move, or pass away. Last updated: April 2026.
Frequently Asked Questions
What is the minimum age for a HECM reverse mortgage?
The youngest borrower (or non-borrowing spouse) must be at least 62 years old. If married, the calculation uses the younger spouse's age, which produces a smaller principal limit (source: hud.gov).
How much can I borrow with a reverse mortgage in 2026?
FHA's 2026 maximum claim amount is $1,209,750. Your principal limit factor depends on age and rate — typically 38% to 70% of home value. A 75-year-old with a $500,000 home and 7.5% rate might access roughly $250,000 minus fees.
Does the reverse mortgage line of credit really grow?
Yes — this is the unique HECM feature. Any unused credit grows annually at the loan rate plus 0.5% MIP. The growth is mandated by federal law and cannot be revoked by the lender, even if home values fall.
Do I have to pay back a reverse mortgage?
Not while you live in the home as your primary residence. The loan becomes due when you sell, permanently move out, or pass away. Heirs typically have 6 months (extendable to 12) to repay the balance, usually by selling the home.
What are the upfront costs of a HECM?
Expect origination fees up to $6,000 (HUD-capped), 2% upfront FHA mortgage insurance premium, third-party closing costs ($2,000-$3,000), and required counseling ($125-$200). Most fees can be financed into the loan.
Can I lose my home with a reverse mortgage?
You can lose the home only if you fail to maintain it, pay property taxes, or pay homeowners insurance. As long as you keep the home in good condition and stay current on taxes/insurance, you cannot be forced out.
Is this calculator's estimate the actual loan amount I'll get?
This is a planning estimate only. Actual principal limit factors are published by HUD monthly and depend on the exact expected rate, your age at closing, and lender fees. Always get a Good Faith Estimate from a HUD-approved lender.