Estimate potential loan amounts from a reverse mortgage. No personal information is collected.
Home Equity Conversion Mortgage (HECM)
Proprietary (Jumbo) Mortgage
Estimated Maximum Loan Proceeds:
$0.00
This is an estimate. Actual loan amounts may vary.
Understanding Reverse Mortgages and This Calculator
A reverse mortgage is a unique financial product designed for homeowners, typically seniors, who own their homes outright or have substantial equity. It allows them to convert a portion of their home equity into cash, without having to sell their home or make monthly mortgage payments. The loan is repaid when the last borrower sells the home, moves out permanently, or passes away.
How Does a Reverse Mortgage Work?
Instead of making payments to a lender, you receive payments from the lender. These payments can be received in a lump sum, as a line of credit, as regular monthly payments, or a combination of these. The loan balance grows over time as interest and fees are added to the principal. The repayment is deferred until a specific event occurs.
Who Qualifies?
Age Requirement: Typically, at least one borrower must be 62 years or older for the most common type, the Home Equity Conversion Mortgage (HECM).
Home Ownership: You must own your home or have a significant amount of equity. For HECM loans, the mortgage must be significantly paid off.
Primary Residence: The home must be your principal residence.
Financial Assessment: Lenders will conduct a financial assessment to ensure you can afford ongoing property taxes, homeowners insurance, and home maintenance.
Counseling: HECM borrowers are required to attend a counseling session with an independent, HUD-approved agency.
Types of Reverse Mortgages
Home Equity Conversion Mortgage (HECM): This is the most common type of reverse mortgage, insured by the Federal Housing Administration (FHA). HECM loans have specific eligibility requirements and lending limits set by the FHA.
Proprietary (or Jumbo) Reverse Mortgages: These are private loans offered by private lenders. They are not FHA-insured and are designed for homeowners with higher home values who may exceed the HECM lending limits. Terms and costs can vary significantly.
Factors Affecting Your Loan Amount
The amount you can borrow through a reverse mortgage depends on several key factors:
Age of the Youngest Borrower: The older the borrower, the higher the potential loan amount, as the lender expects to repay the loan sooner.
Current Interest Rate: Higher interest rates generally lead to lower loan amounts because the loan balance grows faster.
Estimated Home Value: The value of your home is a primary determinant of how much equity you can access.
Loan Program: Different programs (like HECM vs. proprietary) have different rules and lending limits.
Upfront Costs and Fees: These include mortgage insurance premiums (for HECM), origination fees, servicing fees, and appraisal costs, which are factored into the maximum loan amount calculation.
How the Calculator Works (Simplified)
This calculator provides an estimated maximum loan amount. The calculation is based on a formula that considers the factors mentioned above. It generally uses a "Financial Assessment" or "Principal Limit Factor" (PLF) approach:
For HECM: The maximum amount you can borrow is determined by the lesser of:
The appraised value of the home OR the HECM maximum lending limit ($970,800 in 2023 for most areas), whichever is less.
The principal limit determined by the age of the youngest borrower, the expected interest rate, and the Initial Mortgage Insurance Premium (IMIP). A Principal Limit Factor (PLF) is applied to the available home value (or HECM limit).
The formula often looks something like:
Maximum Loan Amount = (Available Home Value or HECM Limit) * Principal Limit Factor (PLF)
The PLF is determined by actuarial tables provided by HUD, which vary based on the youngest borrower's age, the expected mortgage interest rate, and the HECM upfront MIP percentage.
For Proprietary Mortgages: These are often based on a maximum loan-to-value ratio (LTV) set by the lender, applied to the home's appraised value, with a maximum loan amount cap.
Maximum Loan Amount = Home Value * Proprietary LTV Percentage
This calculator simplifies these complex calculations into an estimate. It does not include all possible fees or edge cases, and the exact PLF and proprietary loan terms are subject to lender underwriting and specific program guidelines.
Important Considerations
This calculator is for informational purposes only. It provides an estimate and should not be considered financial advice. Reverse mortgage products are complex and involve significant costs, including origination fees, mortgage insurance premiums, servicing fees, and interest. Always consult with a qualified reverse mortgage professional and a financial advisor before making any decisions.
You are responsible for maintaining the home, paying property taxes, and keeping homeowners insurance current. Failure to do so can lead to loan default.
// HECM Principal Limit Factors (Example data – actual tables are more complex and vary by rate)
// These are simplified factors for demonstration purposes.
// Keys are age, values are rough PLFs for a given interest rate and MIP scenario.
// Real HECM PLFs are derived from complex actuarial tables.
var hecmPrincipalLimitFactors = {
"62": {"6.0": 0.53, "6.5": 0.51, "7.0": 0.49, "7.5": 0.47, "8.0": 0.45, "8.5": 0.43, "9.0": 0.41},
"63": {"6.0": 0.54, "6.5": 0.52, "7.0": 0.50, "7.5": 0.48, "8.0": 0.46, "8.5": 0.44, "9.0": 0.42},
"64": {"6.0": 0.55, "6.5": 0.53, "7.0": 0.51, "7.5": 0.49, "8.0": 0.47, "8.5": 0.45, "9.0": 0.43},
"65": {"6.0": 0.56, "6.5": 0.54, "7.0": 0.52, "7.5": 0.50, "8.0": 0.48, "8.5": 0.46, "9.0": 0.44},
"70": {"6.0": 0.61, "6.5": 0.59, "7.0": 0.57, "7.5": 0.55, "8.0": 0.53, "8.5": 0.51, "9.0": 0.49},
"75": {"6.0": 0.67, "6.5": 0.65, "7.0": 0.63, "7.5": 0.61, "8.0": 0.59, "8.5": 0.57, "9.0": 0.55},
"80": {"6.0": 0.73, "6.5": 0.71, "7.0": 0.69, "7.5": 0.67, "8.0": 0.65, "8.5": 0.63, "9.0": 0.61},
"85": {"6.0": 0.80, "6.5": 0.78, "7.0": 0.76, "7.5": 0.74, "8.0": 0.72, "8.5": 0.70, "9.0": 0.68},
"90": {"6.0": 0.85, "6.5": 0.83, "7.0": 0.81, "7.5": 0.79, "8.0": 0.77, "8.5": 0.75, "9.0": 0.73}
};
// HECM Max Loan Limit (2023) – adjust as needed for current year
var hecmMaxLoanLimit = 970800;
function getHECMPrincipalLimitFactor(age, rate) {
var rateKey = Object.keys(hecmPrincipalLimitFactors["62"]).find(function(k) {
return parseFloat(k) >= rate;
}) || Object.keys(hecmPrincipalLimitFactors["62"]).pop(); // Fallback to highest if rate is higher
if (hecmPrincipalLimitFactors[age] && hecmPrincipalLimitFactors[age][rateKey]) {
return hecmPrincipalLimitFactors[age][rateKey];
} else if (age 90) {
return hecmPrincipalLimitFactors["90"][rateKey] || 0.73; // Use factor for 90 or highest available
} else {
// Interpolate for ages between keys if necessary, or use closest
var ages = Object.keys(hecmPrincipalLimitFactors).map(Number).sort(function(a, b){return a – b});
var lowerAge = ages.filter(function(a){ return a = age; }).shift();
if (lowerAge && upperAge && lowerAge !== upperAge) {
var factorLower = hecmPrincipalLimitFactors[lowerAge][rateKey] || 0;
var factorUpper = hecmPrincipalLimitFactors[upperAge][rateKey] || 0;
var ageRange = upperAge – lowerAge;
var ageDiff = age – lowerAge;
return factorLower + (factorUpper – factorLower) * (ageDiff / ageRange);
} else if (lowerAge) {
return hecmPrincipalLimitFactors[lowerAge][rateKey] || 0;
}
return 0;
}
}
function validateInput(inputId) {
var input = document.getElementById(inputId);
var value = parseFloat(input.value);
if (isNaN(value) || value < 0) {
input.style.borderColor = "red";
return false;
} else {
input.style.borderColor = "#ccc";
return true;
}
}
function updateLoanProgramFactors() {
var loanProgram = document.getElementById("loanProgram").value;
if (loanProgram === "hecm") {
document.getElementById("hecmFactors").style.display = "block";
document.getElementById("proprietaryFactors").style.display = "none";
} else {
document.getElementById("hecmFactors").style.display = "none";
document.getElementById("proprietaryFactors").style.display = "block";
}
}
function calculateReverseMortgage() {
var homeValue = parseFloat(document.getElementById("homeValue").value);
var borrowerAge = parseInt(document.getElementById("borrowerAge").value);
var interestRate = parseFloat(document.getElementById("interestRate").value);
var loanProgram = document.getElementById("loanProgram").value;
var hecmMIP = parseFloat(document.getElementById("hecmUpfrontMortgageInsurancePremium").value);
var proprietaryLTV = parseFloat(document.getElementById("proprietaryMaxLoanAmount").value);
var inputsValid = true;
inputsValid = validateInput('homeValue') && inputsValid;
inputsValid = validateInput('borrowerAge') && inputsValid;
inputsValid = validateInput('interestRate') && inputsValid;
if (loanProgram === 'hecm') {
inputsValid = validateInput('hecmUpfrontMortgageInsurancePremium') && inputsValid;
} else {
inputsValid = validateInput('proprietaryMaxLoanAmount') && inputsValid;
}
if (!inputsValid) {
alert("Please enter valid positive numbers for all fields.");
return;
}
var estimatedLoanProceeds = 0;
if (loanProgram === "hecm") {
if (borrowerAge < 62) {
alert("Borrower must be at least 62 years old for HECM.");
return;
}
// Adjust interest rate to find the correct key (e.g., 6.5% is often used as expected rate)
// For simplicity, let's use the input rate rounded to nearest half percent for lookup, or a default if it's too high/low
var ageForLookup = Math.max(62, Math.min(90, borrowerAge)); // Clamp age for lookup
var rateForLookup = interestRate; // Use the input rate directly for simplicity in this example
// Ensure rate key exists, otherwise use closest or default
var possibleRates = Object.keys(hecmPrincipalLimitFactors["62"]).map(parseFloat);
var closestRate = possibleRates.reduce(function(prev, curr) {
return (Math.abs(curr – rateForLookup) < Math.abs(prev – rateForLookup) ? curr : prev);
});
var rateKey = closestRate.toFixed(1); // Format to one decimal place
var plf = getHECMPrincipalLimitFactor(ageForLookup, parseFloat(rateKey));
var availableHomeValue = Math.min(homeValue, hecmMaxLoanLimit);
// HECM Principal Limit = Available Value * PLF
var principalLimit = availableHomeValue * plf;
// Consider upfront MIP and origination fees which reduce available cash
// HECM Upfront MIP is calculated on the *lesser* of appraised value or HECM limit
var mipBase = Math.min(homeValue, hecmMaxLoanLimit);
var upfrontMIP = mipBase * (hecmMIP / 100);
// For simplicity, let's assume origination fees are included in the PLF logic implicitly or are a fixed percentage.
// In reality, origination fees are complex and tiered.
// We'll subtract the upfront MIP from the calculated principal limit to estimate cash available.
estimatedLoanProceeds = principalLimit – upfrontMIP;
// Ensure proceeds are not negative
estimatedLoanProceeds = Math.max(0, estimatedLoanProceeds);
} else { // Proprietary Mortgage
var maxProprietaryLoan = homeValue * (proprietaryLTV / 100);
// Proprietary loans often have their own limits, but for this calculator, we'll use the LTV.
estimatedLoanProceeds = maxProprietaryLoan;
}
document.getElementById("result").style.display = "block";
document.getElementById("result-value").innerText = "$" + estimatedLoanProceeds.toFixed(2).replace(/\B(?=(\d{3})+(?!\d))/g, ",");
}