Reverse Mortgage Calculator: Balance, Equity and Advances

Reverse Mortgage Balance Calculator

Project how an entered reverse-mortgage balance may grow from financed costs, cash advances, interest and mortgage-insurance charges, then compare it with an assumed future home value.

Amount paid from reverse-mortgage proceeds at closing.
Enter zero when modeling a lump sum only.
This is a scenario input, not a required payment.
Editable balance-based charge; enter zero if not applicable.

What this reverse mortgage calculator does

This tool projects a balance from amounts you enter. It starts with an existing mortgage payoff, an initial cash advance and financed closing costs. Each month it applies the entered interest and balance-based insurance or servicing percentages, adds an optional monthly advance and subtracts an optional repayment. Separately, it projects the home value using the appreciation assumption.

Monthly balance: prior balance × (1 + annual interest ÷ 12 + annual balance charge ÷ 12) + monthly advance − optional repayment. Projected home value: current value × (1 + annual appreciation)years. Remaining equity: projected home value − projected loan balance.

The results answer a balance-and-equity scenario. They do not calculate a HECM principal limit, net available proceeds, eligibility, an expected rate, a lender quote or required financial assessment. Those depend on program rules, age, rates, the lesser of appraised value or applicable limit, property eligibility, existing liens and lender charges.

Worked example

The starting example uses a US$500,000 home, a US$50,000 mortgage payoff, US$75,000 of initial cash and US$15,000 of financed costs. The opening balance is US$140,000. It then models US$1,000 monthly advances, 7% annual interest, a 0.5% annual balance charge, 3% annual home appreciation and no repayments for 10 years. Change every input to match the scenario you want to test.

Keep property obligations separate. A reverse mortgage generally does not remove the borrower’s responsibility for property taxes, homeowners insurance, maintenance and applicable occupancy or property rules. This calculator does not add those costs to the loan balance unless you explicitly include them in another input.

Important limits

This calculator is an educational projection, not financial, legal, tax or housing-counseling advice. It assumes fixed entered rates, monthly compounding, advances at month end, regular optional repayments and a constant appreciation rate. It does not model adjustable-rate changes, a line-of-credit growth feature, tenure-payment actuarial calculations, repair set-asides, tax or insurance advances, servicing schedules, appraisal changes, home-sale costs, maturity events, default, foreclosure, claim limits or non-recourse protections.

For United States HECM information, review the HUD Home Equity Conversion Mortgage program and the Consumer Financial Protection Bureau reverse-mortgage resources. For an actual decision, compare lender disclosures and speak with a HUD-approved housing counselor or other qualified professional.

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Frequently asked questions

Does this calculate how much reverse-mortgage money I can receive?

No. It projects a balance from proceeds and charges that you enter. It intentionally does not infer a principal limit or eligibility from age and home value.

Why can the balance grow even without monthly cash advances?

Interest and any entered balance-based insurance or servicing charge are added to the unpaid balance. Financed closing costs and an existing payoff also become part of the opening balance.

Can I model voluntary repayments?

Yes. Enter a monthly repayment to test a regular-paydown scenario. The model never reduces the balance below zero, but actual loan terms control payment crediting and access to future advances.