Estimate how much you could access from your home equity (HECM)
Net Proceeds by Age
Based on HUD principal limit factors at ~5.5% expected rate.
Available Line of Credit
$127,000
from $227,000 principal limit
Principal limit factor
45.4%
Principal limit
$227,000
How Your Proceeds Are Calculated
Line of Credit Growth
Unused HELOC grows at ~5%/year — money available to you increases over time.
5 yr
$162,088
10 yr
$206,870
15 yr
$264,024
20 yr
$336,969
Explore Your Options
A reverse mortgage could give you access to $127,000 in equity — with no monthly payments required.
Reverse mortgages are age-restricted, require HUD counseling, and the balance grows over time. Today’s rates →
Altgage Inc. NMLS #2447252 | 100 Cambridge St, Floor 14, Boston, MA 02114|A reverse mortgage (HECM is the FHA version most people use) lets homeowners 62+ convert home equity into cash without selling or making payments. The loan compounds and gets repaid when you sell, move out, or pass away. It's a useful retirement tool in specific situations — and a wealth-destroyer in others.
Take the proceeds as a lump sum, monthly payment, line of credit, or a combination. Interest accrues on the outstanding balance and the loan can never exceed the home's value (it's non-recourse). You still owe property taxes, insurance, and maintenance — fall behind and the loan can be called.
You want to age in place and your monthly expenses outrun your retirement income. You have most of your wealth in your home and limited other liquid assets. You don't have heirs you want to leave the house to (or your heirs would inherit it underwater anyway given the accruing balance). Single retirees with paid-off homes are the highest-leverage user.
A reverse mortgage compounds. Borrow $200K at 7% and the balance roughly doubles every 10 years. If you live 20 years, your heirs may inherit a home with little or no equity left. For some families that's fine — Mom needed the money — but it should be a conscious choice, not a surprise.
A traditional HELOC at lower cost if your DTI allows it. Downsizing to extract equity in a one-time, tax-advantaged way. Cash-out refinancing if you still have income to support payments. Reverse mortgages are powerful but expensive — don't take one before testing whether one of these simpler tools solves the same problem.
The youngest borrower on title must be 62 or older, the home must be your primary residence, and you must have substantial equity — there’s no fixed percentage, because how much you can draw is a function of age, rates and home value together, with older borrowers able to access more. HUD requires counseling from an approved independent agency before a HECM application can proceed; it isn’t a formality, and it’s the single best free hour available to anyone considering this. Lenders also run a financial assessment on income and credit — not to approve the loan the way a forward mortgage is approved, but to confirm you can keep paying property taxes and insurance. Fall short and the lender can require a set-aside from your proceeds to cover them, which reduces what you can draw.
Nothing is due while you live in the home and keep up taxes, insurance and maintenance. The loan becomes payable when the last borrower dies, sells the home, or moves out for more than twelve consecutive months — a nursing-home stay past a year is the trigger people most often don’t see coming.
At that point the estate or the heirs have a set window, typically six months with possible extensions, to settle. They have three options: pay the balance and keep the house, usually by refinancing into a conventional loan; sell the house, pay off the loan, and keep whatever is left; or hand the keys to the lender through a deed in lieu and walk away owing nothing further.
The non-recourse protection is the part worth understanding properly. On a HECM, neither you nor your heirs can ever owe more than the home is worth at the time of repayment. If the balance has grown past the value, the FHA insurance fund covers the shortfall. And if heirs want to keep a home that’s underwater, they can buy it for 95% of the appraised value rather than the full loan balance.
Getting out early. You can repay a reverse mortgage at any time without penalty, by selling or refinancing. If you took a lump sum and changed your mind quickly, federal law also gives you three business days to rescind after closing.
HECM — the Home Equity Conversion Mortgage, insured by FHA and by a wide margin the most common. It carries the non-recourse guarantee, requires HUD-approved counseling, and is capped by an FHA maximum claim amount that limits how much of a high-value home counts toward your proceeds. This is what our calculator models.
Proprietary, sometimes called jumbo. Private products from individual lenders, built for homes worth more than the FHA cap allows for. No FHA insurance and no mortgage insurance premium, but also no federal guarantee, and terms vary by lender rather than by rulebook. Worth pricing if your home is well above the HECM limit.
Single-purpose. Offered by some state and local government agencies and non-profits, restricted to one use the lender approves — property taxes, or a specific repair. Much cheaper than the other two and much narrower. Rarely advertised, so it’s worth calling your local Area Agency on Aging before assuming a HECM is the only route.
The loan is repaid when the last borrower dies, sells the home, or moves out for more than twelve consecutive months — usually from the sale proceeds. Heirs who want to keep the house can refinance into a conventional loan instead, and if the balance exceeds the home’s value they can purchase it for 95% of the appraised value.
Your heirs have a set window, typically around six months with possible extensions, to sell the home, refinance it, or deed it back to the lender. Because a HECM is non-recourse, they can never owe more than the home is worth — any shortfall is covered by FHA insurance, not by the estate.
Yes, if you stop meeting the loan’s ongoing obligations. You remain responsible for property taxes, homeowner’s insurance, any HOA dues, and basic maintenance, and falling behind on those can put the loan into default even though no mortgage payment is required. Moving out of the home for more than twelve months also triggers repayment.
The balance compounds and it consumes the equity you’d otherwise leave behind. Upfront costs are high relative to a HELOC, the money reduces what heirs inherit, and drawing a large lump sum early means paying interest on it for as long as you live in the home. For a borrower with other liquid assets, a HELOC or downsizing often solves the same problem for less.
It depends on the age of the youngest borrower, current interest rates, and your home’s value, with older borrowers and lower rates producing larger amounts. On a HECM, an FHA maximum claim amount also caps how much of a high-value home counts toward the calculation. The calculator above estimates your figure; a HUD counselor will confirm it.
It’s a good fit for a narrow set of situations: you want to stay in the home long-term, most of your wealth is in it, your income doesn’t cover your expenses, and leaving the house to heirs isn’t a priority. It’s a poor fit if you might move within a few years, if you have other liquid assets to draw on first, or if the house is the inheritance you’re planning around.
Yes. You can refinance one HECM into another — often done when home values have risen enough to unlock more proceeds, or when rates have fallen — and you can refinance out of a reverse mortgage into a conventional loan if you qualify on income. HUD applies a benefit test to HECM-to-HECM refinances so borrowers aren’t churned into new loans that don’t materially help them.