What is a reverse mortgage calculator?

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Ask a Lender
January 30, 2017 | Updated September 19, 2017


Key Points

Factors determined with a reverse mortgage calculator

  • Eligibility for a reverse mortgage based on your age and the value of your home.
  • Loan payoff amounts based on time, interest rates and reverse mortgage payments.
  • Interest rates, costs and fees, principal limits of various reverse mortgage programs. 

If you are 62 years of age or older, own your own home and are looking to use the equity you have built up in that home to help finance your retirement, but wish to stay in your home, then a reverse mortgage might be what you are looking for.

But what if you still owe money on that home? Do you have enough equity to make a reverse mortgage work? How much will a reverse mortgage cost to set up? Do you even qualify? How much will you, your spouse, or your estate have to pay back when that loan comes due 10 years from now or 20 or 30? A reverse mortgage calculator can help answer these questions.

Online calculators

You can find reverse mortgage calculators on many websites. They are simply forms you fill out that provide information based on the data you input. There are a couple different types of calculators. The simplest ones take your age, estimated home value and amount you still owe on your mortgage and determine if you are eligible for a reverse mortgage and, perhaps, provide an estimate of how much of your home's equity you can access through the reverse financing.

This type of reverse mortgage calculator is useful if you want to check if you qualify before talking with a lender. They often are found on lender websites, however, and may ask you to submit contact information as well, such as your name, address, e-mail address, or phone number. Submitting the form generally alerts the lender to have a reverse mortgage originator contact you to discuss the mortgage.

Another type of reverse mortgage calculator allows you to estimate how much interest will accrue on your loan over time based on various loan amounts and interest rates. This can help you determine how much of your home's equity you want to convert into a reverse mortgage. The lump-sum advance or monthly payments you receive from the reverse mortgage, plus the interest accrued on those amounts over time will determine the loan amount needed to pay off the reverse mortgage when the time comes.

Association calculator

The National Reverse Mortgage Lenders Association (NRMLA) sponsors a reverse mortgage calculator that provides a great deal of information based on the data you input. The personal data required by the form only includes your zip code, birth date, estimated value of your home and mortgage information. NRMLA is not a lender. It is a trade group representing the reverse mortgage industry. So, no lenders will contact you after submitting your data.

The NRMLA reverse mortgage calculator provides information about interest rates for several different reverse mortgage programs; calculates mortgage insurance payments, closing costs and fees; determines available principal limits, lump-sum amounts and monthly advances; and lists the estimated total fees and costs to set up the reverse mortgage. The output is fairly daunting, with several rows of numbers and percentages, but the NRMLA reverse mortgage calculator is a good starting point for researching eligibility and costs on reverse mortgages.

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