Reverse Mortgage Calculator — HECM Principal Limit and Cash Available at 62+

Calculate your HUD Home Equity Conversion Mortgage (HECM) Principal Limit and choose between tenure, term, line of credit, and lump-sum options.

Home value (appraised)

2026 HECM cap: $1,209,750 (used as appraised value if home is worth more).

Youngest borrower age

yrs

Must be 62+. Older = higher PLF.

Expected interest rate

Apr 2026 typical: 6.0-7.0%.

Existing mortgage to pay off

Payment option

Term length (if Term option)

yrs

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How to use

1 Enter home appraised value (USD). The HECM MCA is the lesser of this and HUD's $1,249,125 lending limit.
2 Enter the youngest borrower's age (must be 62+). Older = higher PLF; a 75-year-old gets meaningfully more cash than a 62-year-old.
3 Enter Expected Rate (10-year SOFR + lender margin, typically 6.5-8% in 2026). Lower rate = higher PLF.
4 Enter existing mortgage balance (must be paid off at HECM closing — first claim on proceeds).
5 Click Calculate to see Principal Limit, mandatory obligations (existing mortgage + closing costs), and net cash available.

HECM Lending Limits and Eligibility (2026)

Metric	2026 value
HUD HECM lending limit (MCA cap)	$1,249,125
Minimum borrower age	62
Property type	1-4 unit primary residence
Up-front MIP	2% of home value
Annual MIP	0.50% of loan balance
HUD-approved counseling	Required (HECM Counseling)

How the Principal Limit Factor Works

The PLF determines the percentage of MCA you can borrow. It's set by HUD tables based on: (1) youngest borrower age — 62 yields ~50%, 75 yields ~60%, 85 yields ~70%; (2) Expected Rate — 6% rate yields higher PLF than 8% rate. So a 75-year-old with $500K home at 7% Expected Rate might receive ~$300K Principal Limit, of which any existing mortgage and closing costs are deducted.

Payout Options

Option	Description
Lump sum	One-time payment at closing (only with fixed-rate HECM)
Tenure	Equal monthly payments for life as long as you live in the home
Term	Equal monthly payments for a set number of years
Line of credit	Draw as needed; unused balance grows at the loan rate (popular)
Modified tenure / term	Combination of line of credit + monthly payments

When HECM Becomes Due

The loan becomes due and payable when: (1) the last borrower dies, sells, or moves out for 12+ months; (2) borrower fails to pay property taxes or insurance; (3) borrower fails to maintain the property. Heirs typically have 6-12 months to refinance, sell, or pay off the loan to keep the home. Non-recourse — the borrower (or heirs) never owe more than the home's value.

When HECM Makes Sense

Suitable for: house-rich, cash-poor seniors who want to age in place, supplement Social Security with home equity, eliminate existing mortgage payments, or create a standby line of credit. Not suitable for: those planning to move in 1-2 years, retirees who can downsize to a paid-off smaller home, or seniors with strong investment portfolios who can use 4% withdrawals instead. The CFPB and AARP both publish caution lists — high closing costs make HECM expensive to enter and exit.

FAQ

Q What is a HECM reverse mortgage?

The Home Equity Conversion Mortgage is the only reverse mortgage backed by HUD/FHA. It allows homeowners 62+ to borrow against home equity without monthly mortgage payments. The loan is repaid when the borrower dies, sells, or moves out. As of 2026, the HUD lending limit is $1,249,125.

Q How much money can I get from a reverse mortgage?

Typically 40-70% of home value, depending on age and rates. A 62-year-old at 7% rate might get ~50% Principal Limit; a 75-year-old at 7% gets ~60%; an 85-year-old at 7% gets ~70%. Older borrowers and lower rates yield higher PLF. Existing mortgage balance and closing costs are deducted from gross PL to get net cash.

Q Do I lose my house with a reverse mortgage?

No — you remain on title and keep ownership. The loan becomes due when the last borrower dies, sells, or permanently moves out (typically 12 months absent). Heirs can refinance, sell, or pay off the loan to keep the home. Critical: you must continue paying property taxes, homeowners insurance, and maintenance.

Q How much does a reverse mortgage cost?

Closing costs run 5-10% of home value: up-front Mortgage Insurance Premium (2% of home value), origination fee (capped at $6,000), title insurance, appraisal, counseling fee. On a $500K home, total upfront costs commonly $15,000-$25,000. Plus annual MIP 0.50% of loan balance.

Q Is a reverse mortgage a good idea?

Suitable for house-rich, cash-poor seniors who want to age in place. Not suitable for those planning to move in 1-2 years (closing costs make it expensive), or retirees with adequate other resources. The CFPB and AARP publish caution lists. HECM Counseling (HUD-approved, ~$125 fee) is mandatory before closing — use it to evaluate alternatives.

Q What is the difference between a HECM and a HELOC?

HELOC requires monthly interest payments and good credit; HECM has no monthly payments and lighter underwriting. HELOC is cheaper to set up; HECM has high closing costs. HECM grows over time (negative amortization) — your loan balance increases with interest. HELOC is best for short-term needs; HECM for long-term aging-in-place.

Q Will a reverse mortgage affect my Social Security or Medicare?

No effect on Social Security or Medicare benefits — they are not income-tested. However, Medicaid and SSI are means-tested — large lump sums or excessive monthly payments from HECM could affect eligibility. Spread distributions or use line-of-credit option to manage.

Q Can my heirs keep the home after I die?

Yes, by paying the loan balance — typically with a refinance, cash, or sale of the property. Heirs typically have 6-12 months. The loan is non-recourse, so they never owe more than the home's value (95% of appraised value if selling). If the home is worth less than the loan, FHA insurance covers the difference.