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.

Both spouses if married — youngest age governs
Capped at FHA 2026 max claim $1,209,750
Must be paid off from HECM proceeds
10-year CMT + lender margin (~7-8% in 2026)
Capped at $6,000 by HUD rules

Year-by-Year Growth

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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.