How to use the reverse-mortgage balance calculator
Build one dated scenario at a time, then compare changes instead of treating the first result as a quote.
- Choose Project a known advance when a lender illustration already shows a level monthly amount. Choose Solve for monthly advance only when you have selected your own ending-balance ceiling; that ceiling is not a HUD principal limit.
- Enter the current home value, starting loan balance or initial proceeds, interest rate, ongoing mortgage-insurance rate, and any servicing fee from the same dated source. Do not mix a rate from one illustration with proceeds from another.
- Add a clearly labeled home-value scenario and annual taxes, homeowners insurance, association charges, and assessments paid outside the loan. Those property charges remain the borrower's responsibility and are not extra loan proceeds.
- Select Update projection, then read the headline result, balance equation, component legend, loan-versus-home-value chart, and annual table in that order. Recalculate with a higher rate and a weaker home-value path before relying on the comparison.
How to read the ending balance, advances, costs, and remaining equity
The ending loan balance is debt projected at the selected year; it is not cash available to withdraw. The balance begins with the entered starting amount, then adds scheduled advances, financed servicing fees, interest, and mortgage-insurance charges. Total advances counts only the additional level monthly advances after the starting point, while the component legend reconciles every positive amount included in the ending balance.
Projected remaining equity is the positive gap between the entered home-value path and the projected balance. It does not deduct selling costs, probate or estate expenses, separately paid property charges, repairs, taxes, or another lien that was omitted from the starting balance. If the modeled balance reaches or exceeds the home-value path, review the product's actual nonrecourse, repayment, occupancy, and heir-sale provisions instead of inferring them from the chart.
Reverse-mortgage illustration: obtain the proceeds input from an authorized process
For a U.S. Home Equity Conversion Mortgage scenario, do not infer available proceeds from home value alone. HUD principal-limit factors depend on age, expected rate, value and program rules, while liens, set-asides, costs, and payment-plan selections affect usable funds. HUD lists $1,249,125 as the 2026 HECM maximum claim amount, but that ceiling is not a promise of proceeds. Enter only a dated lender or counselor illustration and label every figure by source and year.
Reverse-mortgage illustration: map advances on their actual dates
Distinguish an initial lump sum, scheduled tenure or term advances, line-of-credit draws, and amounts used to satisfy existing liens or property charges. The calculator can place declared advances on a timeline, but payment-plan availability and limits come from the program and loan documents. A monthly amount received by the borrower is not investment income produced by the home; it is loan proceeds that generally increase debt. Keep unused availability separate from money already borrowed.
Reverse-mortgage illustration: accumulate interest and financed charges
Apply the entered rate and stated charge convention to the opening balance, prior advances, mortgage-insurance amounts, servicing items if applicable, and financed closing costs. Variable-rate changes can materially alter later balances, so test more than one path. Use a dated independent property valuation scenario and the Amortization Calculator to contrast a forward, pay-down loan; reverse-mortgage growth follows a different cash-flow direction.
Reverse-mortgage illustration: preserve property-charge and occupancy duties
Borrowers generally remain responsible for taxes, insurance, property condition, and required occupancy under the loan terms. Maintain a separate budget for those obligations with the Living Expenses Calculator, because they do not disappear when no regular principal-and-interest payment is required. If a forward mortgage is being considered as an alternative, test that distinct required-payment structure with the Home Loan Affordability Calculator instead of treating it as another reverse-mortgage advance pattern. Stress tax, premium, repair, and rate increases, and examine what happens if the home must be sold earlier than expected. This tool does not determine default, non-borrowing-spouse protection, or repayment events.
Reverse-mortgage illustration: complete counseling and reconcile disclosures
HUD-approved HECM counseling is mandatory and independent counseling resources explain alternatives, costs, obligations, and implications. Compare the calculator with the lender's official amortization projection, appraisal, principal-limit calculation, payment-plan documents, and closing disclosures. The page does not issue an offer, establish that a borrower is at least the applicable age, approve a property, calculate public-benefit effects, or provide estate advice. Family members and qualified tax or legal professionals may need the actual documents for planning.