How to calculate reverse mortgage proceeds
A Home Equity Conversion Mortgage (HECM), the FHA-insured reverse mortgage, is sized in four steps. HUD fixes every input except your age, your home's value and the lender's margin, so the arithmetic can be done without applying anywhere:
- Maximum claim amount. The lesser of the appraised value and HUD's national limit, $1,249,125 for case numbers assigned in 2026.[1]
- Principal limit factor. From HUD's table, by the age of the youngest borrower (or eligible non-borrowing spouse) and the expected interest rate.[2][3]
- Principal limit. Maximum claim amount × factor.
- Net proceeds. The principal limit minus the upfront mortgage insurance premium, the origination fee, other closing costs and any mortgage that has to be paid off.
Principal limit = maximum claim amount × principal limit factor$450,000 × 0.392 = $176,400
| Step | Amount |
|---|---|
| Principal limit | $176,400 |
| Upfront MIP (2% of the maximum claim amount) | −$9,000 |
| Origination fee (HUD cap) | −$6,000 |
| Mortgage payoff | −$60,000 |
| Net principal limit | $101,400 |
| Available in the first 12 months, after paying the above | $30,840 |
Other third-party closing costs, such as the appraisal and title charges, come out of the same principal limit; enter your quote in the calculator.
HUD's principal limit factors
The factor is the share of the home's value you can borrow, and it rises with age and falls as the expected rate rises. The table in use applies to FHA case numbers assigned on or after October 2, 2017, and covers ages 62 to 99.[3][2] HUD rounds the expected rate to the nearest 1/8 point and the age to the nearest year, treats borrowers over 99 as 99, and its calculator accepts expected rates from 3% up.[4]
| Age | 5% | 5.5% | 6% | 6.5% | 7% | 7.5% | 8% |
|---|---|---|---|---|---|---|---|
| 62 | 0.410 | 0.382 | 0.357 | 0.334 | 0.312 | 0.291 | 0.272 |
| 65 | 0.430 | 0.403 | 0.378 | 0.355 | 0.333 | 0.313 | 0.294 |
| 70 | 0.465 | 0.439 | 0.415 | 0.392 | 0.370 | 0.350 | 0.330 |
| 75 | 0.492 | 0.467 | 0.443 | 0.421 | 0.400 | 0.379 | 0.360 |
| 80 | 0.534 | 0.510 | 0.488 | 0.466 | 0.446 | 0.427 | 0.408 |
| 85 | 0.591 | 0.570 | 0.549 | 0.530 | 0.511 | 0.493 | 0.476 |
| 90 | 0.653 | 0.636 | 0.618 | 0.602 | 0.586 | 0.570 | 0.555 |
The factor uses the youngest spouse's age even when that spouse is not a borrower,[2] which can lower the amount a lot: at 6.5%, a 62-year-old's factor is 0.334 against 0.421 at 75.
The expected rate: 10-year Treasury plus the lender's margin
For an adjustable-rate HECM, the expected rate is the lender's margin plus the 10-year Constant Maturity Treasury yield; HUD requires the 10-year CMT for this purpose.[5][6] The 10-year Treasury yield was 4.98% on November 10, 2026,[7] so every point of margin adds a point to the expected rate and lowers the factor. The 6.5% in the example is an illustration, not a quote; ask lenders for their margin.
| Expected rate | Factor | Principal limit | Net after the example costs and payoff |
|---|---|---|---|
| 5% | 0.465 | $209,250 | $134,250 |
| 5.5% | 0.439 | $197,550 | $122,550 |
| 6% | 0.415 | $186,750 | $111,750 |
| 6.5% | 0.392 | $176,400 | $101,400 |
| 7% | 0.370 | $166,500 | $91,500 |
| 7.5% | 0.350 | $157,500 | $82,500 |
| 8% | 0.330 | $148,500 | $73,500 |
Costs: mortgage insurance and the origination fee
FHA insurance on a HECM costs 2% of the maximum claim amount at closing and 0.5% of the loan balance each year after that.[3] The lender's origination fee is capped by regulation at the greater of $2,500 or 2% of the first $200,000 of the maximum claim amount plus 1% of the rest, and never more than $6,000.[8]
| Maximum claim amount | Upfront MIP (2%) | Origination fee cap |
|---|---|---|
| $100,000 | $2,000 | $2,500 |
| $200,000 | $4,000 | $4,000 |
| $300,000 | $6,000 | $5,000 |
| $450,000 | $9,000 | $6,000 |
| $600,000 | $12,000 | $6,000 |
| $1,249,125 | $24,983 | $6,000 |
Each month's interest and mortgage insurance premium are added to the loan balance,[10] and repayment is deferred until the loan becomes due and payable,[11] so what you owe grows over time. In the first 12 months you can take the greater of 60% of the principal limit, or your mandatory obligations (such as these costs and a mortgage payoff) plus 10% of it.[9][10]
Ways to receive the money
An adjustable-rate HECM can pay a monthly amount for a set term, a monthly amount for as long as you live in the home (tenure), a line of credit, or a mix; a fixed-rate HECM must be taken as a single lump sum.[11] Tenure payments are calculated as if the loan ran until the youngest borrower reaches 100 (age 95 is the oldest age used), even though they continue for as long as the loan is outstanding.[10] The calculator's tenure figure follows that idea but is an estimate; the lender's figure will differ slightly.
A reverse mortgage calculator without personal informationThis page asks for no name, email, phone number or address, and nothing you type leaves your browser. Before an actual application, HUD requires counseling from an approved HECM counselor for every borrower and any non-borrowing spouse,[13] and the counseling certificate is valid for 180 days.[14]
Who can get a HECM, and alternatives
The youngest borrower must be at least 62 at closing.[12] Younger homeowners who want to borrow against equity can compare a HELOC or a home equity loan, which require monthly payments but do not grow the balance the same way; the HELOC LTV calculator shows how much those allow. If the goal is a lower housing payment, the recast calculator may also help.
Worked example
- Maximum claim amount: $450,000 is below $1,249,125, so it is $450,000.
- Factor at age 70 and 6.5%: 0.392. Principal limit: $176,400.
- Upfront MIP $9,000; origination fee $6,000 (2% of $200,000 + 1% of $250,000, capped at $6,000); payoff $60,000. Mandatory obligations: $75,000.
- Net principal limit: $101,400. First-year limit: 60% × $176,400 = $105,840, so $30,840 is available after the obligations in year one.
- Tenure estimate: about $671 a month.
Frequently asked questions
How much can I get from a reverse mortgage?
The principal limit is the home's value (up to $1,249,125 in 2026) times HUD's factor for your age and expected rate. At 70 with $450,000 at 6.5%, it is $176,400 before costs and payoffs.[2]
What is the reverse mortgage limit for 2026?
$1,249,125 for FHA case numbers assigned from January 1 through December 31, 2026.[1]
Is there a reverse mortgage calculator without personal information?
Yes, this one. It runs entirely in your browser and asks only for an age, a home value, an expected rate and costs.
How is the expected rate on a reverse mortgage set?
Sources
- Mortgagee Letter 2025-22: 2026 Home Equity Conversion Mortgage (HECM) Limits
- HECM Principal Limit Factor Tables, effective on and after October 2, 2017
- Mortgagee Letter 2017-12: HECM Mortgage Insurance Premium Rates and Principal Limit Factors
- HECM Calculator: Steps for Processing (FHA Connection help)
- 24 CFR 206.3, Definitions (expected average mortgage interest rate, principal limit)
- Mortgagee Letter 2021-08: HECM index (10-year CMT for the expected rate)
- Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity (DGS10)
- 24 CFR 206.31, Allowable charges and fees (origination fee)
- Mortgagee Letter 2013-27: Changes to the HECM Program Requirements (first-year disbursement limit)
- 24 CFR 206.25, Calculation of disbursements
- 24 CFR 206.17(b) and 206.19, HECM interest rate and payment options
- 24 CFR 206.33, Age of borrower
- 24 CFR 206.41, Counseling
- HUD Handbook 4000.1 HECM Origination and Servicing Overview