Reverse Mortgage Calculator

A reverse mortgage, which is a loan that allows homeowners to borrow money against their home’s equity, can give senior homeowners the income they need to maintain their lifestyle, pay off debt, cover home improvement expenses or meet other financial goals.

Thinking about borrowing a reverse mortgage? Use our free reverse mortgage calculator to determine how much money you might qualify to receive in a lump-sum payment. No personal information is required to get your free lump-sum estimate.

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How to use our reverse mortgage calculator

Our reverse mortgage calculator can help you estimate how much of a lump sum you’ll receive if you decide to borrow a reverse mortgage.

Start by inputting the youngest co-borrower’s age, your estimated home value, outstanding mortgage balance (if applicable) and your ZIP code. You’ll also need to select the property type and how the property is used. Please note that any property use other than “primary residence” will disqualify you from taking out a reverse mortgage.

Once you’ve added all your loan details, our reverse mortgage calculator will display your estimated lump-sum amount. Now you can gather reverse mortgage offers from multiple lenders.

Reverse mortgage FAQs

What is a reverse mortgage?

A reverse mortgage is a type of home loan that lets borrowers access the equity they’ve built over the years. Rather than making a mortgage payment each month, borrowers receive income from their lender in the form of a lump sum, monthly payout or line of credit.

Who qualifies to get a reverse mortgage?

You must meet the following general requirements to qualify for a reverse mortgage:

  • Be at least 62 years old
  • Own your home free and clear or have a small remaining mortgage balance
  • Use the home securing the loan as your primary residence
  • Don’t have any delinquencies on any federal debt
  • Participate in reverse mortgage counseling (for HECM loans)

When does it make sense to get a reverse mortgage?

A reverse mortgage makes sense if you need to supplement your income and plan to age in place. It also works if you can comfortably keep up with your homeowners insurance, property taxes and routine maintenance.

What are the different types of reverse mortgages?

There are three main types of reverse mortgages:

  • A home equity conversion mortgage (HECM), which is the only reverse mortgage backed by the Federal Housing Administration.
  • A proprietary reverse mortgage, which is provided by a private company and often caters to homeowners with high-priced homes.
  • A single-purpose reverse mortgage, which is usually provided by local or state governments and nonprofit organizations and typically has income limitations.

How much equity do you need for a reverse mortgage?

Equity requirements for a reverse mortgage vary by lender, but a good rule of thumb is to have at least 50% equity in your home.

If you don’t own your home outright, you’ll need to use some of your available equity to pay off your outstanding forward mortgage balance before you can receive any income from a reverse mortgage.

How much does a reverse mortgage cost?

There are several reverse mortgage fees, including:

  • A maximum $6,000 loan origination fee
  • An initial mortgage insurance premium, which costs 2% of your home’s value
  • An annual mortgage insurance premium, which costs 0.5% of your home’s value
  • An appraisal fee, title search and insurance and other closing costs

How is a reverse mortgage repaid?

A reverse mortgage is typically paid back when you move out of the home or pass away. In many cases, the loan is repaid through a home sale.

What about my taxes and insurance?

When you borrow a reverse mortgage, you’re no longer making monthly mortgage payments. However, you’ll still be responsible for paying your homeowners insurance premiums and property taxes. Failure to keep up with these ongoing costs can lead to reverse mortgage foreclosure.

How can you avoid a reverse mortgage scam?

Follow these tips to avoid falling victim to a reverse mortgage scam:

  • Ignore unsolicited reverse mortgage advertisements and offers.
  • Cease communication with any salesperson trying to pressure you into a decision.
  • Watch out for contractors encouraging you to take out a reverse mortgage to cover home improvements.
  • Don’t sign any documents that aren’t clear.
  • If you’re interested in a HECM loan, be sure to work with an FHA-approved lender.