Updated: September 29, 2025
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Use a reverse mortgage calculator to figure out how much cash you can get from your home's equity. Unlike regular mortgages where you make monthly payments, reverse mortgages let you turn part of your home's value into money you can spend now.
MoneyGeek's reverse mortgage calculator shows you the potential loan amount. Here's what information you'll need and what the results actually mean.
INPUT | WHAT TO INPUT |
|---|---|
Home Value | Enter your home's current market value. Lenders use this to figure out how much equity you have available for a reverse mortgage. |
Existing Mortgage Balance | If you still owe money on your mortgage, it'll be paid off with your reverse mortgage money first. This reduces how much cash you'll actually get. |
Expected Interest Rate | The interest rate affects how fast you'll use up your home equity. Lower rates mean your equity lasts longer and you might qualify for more money. |
Age of the Youngest (Or Only) Borrower | Lenders use your age to estimate how long you'll live in the home. Older borrowers typically get larger amounts because the loan term is expected to be shorter. |
OUTPUT | WHAT OUTPUT MEANS |
|---|---|
Lump Sum | Get all your money upfront in one big payment. Good if you need cash right away for home repairs or paying off debt. |
Line of Credit | Draw money as you need it up to your limit. Perfect if you want access to cash over time for unexpected expenses. |
Monthly Payments for Life | Get steady monthly payments as long as you live in your home. Great for supplementing retirement income and covering ongoing expenses. |
A reverse mortgage makes sense when you need cash, have lots of home equity and plan to stay in your house for years. It doesn't work well if you want to leave your home to your kids or might move soon.
Here are some scenarios where reverse mortgages help (and when they don't):
Linda is a 70-year-old retired school teacher living in the suburbs of a mid-sized city. She now enjoys her retirement, keeping herself occupied with gardening, book club meetings and her grandchildren. Linda wants to maintain her lifestyle without compromising her independence, but her savings are dwindling.
Linda owns her home outright and is assuming tapping into its equity to supplement her pension and social security. Having a monthly income stream to cover her expenses, from health care to home maintenance, without the burden of monthly repayments leads her to consider a reverse mortgage.
A reverse mortgage with monthly income payments is the best option for Linda because she needs a steady income stream to sustain her lifestyle in retirement. Owning her home outright presents an opportunity, allowing Linda to access its equity as supplemental income, covering essential expenses without monthly loan repayments.
Robert's 65, recently retired from civil engineering, and loves working on woodworking projects and volunteering at the local maritime museum. His home means everything to him; it's full of memories and his personal projects.
Unexpected medical bills hit, and he wants to help his grandchildren with college costs. But he also wants to leave his home to his kids, which makes him hesitant about a reverse mortgage that would eat into the home's equity and saddle his children with debt.
Not for Robert. He's got conflicting goals: he needs money now but wants to preserve his legacy. A home equity loan or HELOC makes more sense. He can access the money he needs without compromising what he'll leave his children.
Jasmine's 68, a former music teacher who still directs the local choir and fills her days with music and community service. Her family home has been passed down for generations and serves as a gathering spot for local music events.
She wants to convert part of her home into a small community music studio and is thinking about using a reverse mortgage to pay for it. But she's worried about reducing her home's equity since she wants to leave a substantial inheritance to her children.
A reverse mortgage is probably not the best choice for Jasmine. While a reverse mortgage gives her immediate access to equity without monthly payments, she should look at other options to preserve her family legacy. Personal loans offer straightforward repayment and lower interest rates than credit cards if she qualifies. She might also look into grants from local community organizations - that way she keeps all her equity without taking on any debt.
Here are some immediate steps you might consider taking after calculating your potential reverse mortgage:
Speak with a Department of Housing and Urban Development (HUD)-approved reverse mortgage counselor to get a comprehensive understanding of the reverse mortgage process. They can help you evaluate your options and discuss any financial implications. You can find a list of HUD-approved counseling agencies on the HUD website.
Start gathering necessary documents, such as proof of age (like a government-issued ID), proof of residence, documentation of income, your home's title and recent property tax statements. Details about your existing mortgage and any homeowners association (HOA) fees can also be useful.
Consider how the reverse mortgage fits into your long-term financial plan, particularly with estate planning and any plans to leave assets to heirs. Understand how your preferred payment option fits with your budget.
If you intend to leave your home to your heirs, it's advisable to discuss your reverse mortgage plans with them as it may impact their inheritance by depleting home equity.
Comparing a reverse mortgage and a HELOC can help homeowners choose the right option. Both let you access home equity, but while a reverse mortgage provides income without repayments, a HELOC requires monthly payments. Knowing these differences can lead to more informed choices. Explore our comparison table for more insights.
Comparison Area | Reverse Mortgage | HELOC |
|---|---|---|
Age Requirement | 62+ years | None |
Repayment | No monthly repayments required | Monthly payments required |
Access to Funds | Lump sum, line of credit or monthly payments | Credit line, borrow as needed |
Impact on Home Equity | Reduces equity over time, paid upon sale or death | Reduces equity as funds are drawn |
Purpose | Supplementing retirement income | Home improvements, debt consolidation |
Interest Rates | Fixed or variable, generally higher than HELOCs | Variable rates, may increase over time |
Risk of Foreclosure | Lower, as long as property taxes and insurance are paid | Yes, if payments are missed |
Reverse mortgage calculators can be confusing at first. Here are answers to the most common questions about how they work and what affects your loan estimate.
A reverse mortgage is a loan for homeowners 62 and older that allows them to convert part of their home equity into cash without monthly mortgage payments. The loan is repaid when the homeowner sells the house, moves out or passes away.
Reverse mortgages can be paid out as a lump sum, a line of credit, monthly payments or a combination of these options.
Enter your home value, existing mortgage balance, expected interest rate and the age of the youngest borrower. The calculator estimates the loan amount and potential payment options.
The amount depends on your home’s value, current interest rates and the age of the youngest borrower. Typically, older borrowers with higher home values can access more funds.
No, reverse mortgage payouts are not considered income and are not taxed.
Alternatives include home equity loans, home equity lines of credit (HELOCs), refinancing your mortgage, selling the home and downsizing.
About Zachary Romeo, CBCA
Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.
Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.
