Reverse Mortgage Payment Calculator

How HECM Reverse Mortgage Works in 2026

A Home Equity Conversion Mortgage (HECM) is the FHA-insured reverse mortgage available to homeowners 62 and older. The lender pays YOU — either as a lump sum, monthly tenure payments, or growing line of credit — secured by your home equity. No monthly mortgage payments are required as long as you live in the home, keep current on property taxes and insurance, and maintain the property.

The maximum loan ('Principal Limit') depends on the youngest borrower's age, the home value (capped at the 2026 HECM limit of $1,209,750), and the current expected interest rate. Older borrowers and lower rates yield higher proceeds. Source: HUD.gov HECM Program (FHA 4235.1). Last updated: May 2026.

HECM Costs and Fees

Total upfront costs typically $10,000-$25,000 — substantial. HECM is most economical when you'll stay in the home 7+ years.

When HECM Makes Sense

HECM is right for (1) homeowners 70+ with significant home equity who want monthly cash flow without selling, (2) borrowers who need a one-time lump sum to pay off an existing mortgage and eliminate the monthly payment, (3) homeowners who want a line of credit growing at the loan rate as a hedge against future expenses, and (4) couples planning to age-in-place where the home will eventually be sold.

HECM is wrong for (1) borrowers who might move within 3-5 years (closing costs not recovered), (2) those who can sell and downsize instead (often financially superior), and (3) anyone with major medical conditions likely to force a move to assisted living soon (HECM becomes due in full when you no longer occupy the home as principal residence).

Heirs and HECM at Borrower's Death

When the last borrower dies or permanently moves out, heirs have 6 months (extendable to 12) to (1) repay the loan balance and keep the home, (2) sell the home and keep any equity above the loan balance, or (3) deed the home to the lender (no liability — HECM is non-recourse). Critically, heirs never owe more than the home's value at sale — the FHA MIP protects them.

Reverse Mortgage Payment Calculator: How Tenure Payments Are Sized

The reverse mortgage payment calculator above uses HUD's actuarial tables to convert your Principal Limit into a monthly tenure payment. Per HUD HECM program rules, a tenure payment is sized so the loan balance reaches the Maximum Claim Amount (MCA) when the youngest borrower turns 100 — not "lifetime" in the actuarial sense, just very long. A 75-year-old borrower with $400K Principal Limit at 7% expected rate gets ~$2,650/month tenure for life-of-occupancy. If you take a partial lump sum first, the tenure portion shrinks proportionally. Always re-run the calculator after any draw decision; the monthly check is not a fixed amount — it is whatever the actuarial table outputs for your residual Principal Limit.

Tenure vs Term vs Line of Credit: When the Calculator Output Misleads

The same Principal Limit yields very different monthly figures depending on payout choice: tenure pays a smaller monthly amount but for life; term pays a larger monthly amount but stops after the chosen period (typically 5–15 years); line of credit pays nothing monthly but grows the unused balance at the loan rate per CFPB analysis — often the highest expected lifetime value. CFPB analysis shows that for borrowers under 75, the growing line of credit usually delivers the highest expected lifetime value. Run all three modes in the calculator before choosing; the "biggest monthly check" is rarely the best decision.

Sources: HUD HECM Program FAQ, CFPB Reverse Mortgage Report, HUD FHA Handbook 4235.1. Last updated 2026-06-30.