Reverse Mortgage · HECM Income
Reverse Mortgage Income Calculator
Quick answer: Your reverse mortgage income comes from the net principal limit: the principal limit on your HECM quote minus any mortgage payoff, closing costs and the 2% upfront mortgage insurance premium. A term payout spreads that amount over the years you choose; a tenure payout lasts as long as you live in the home. Enter your quote's principal limit to see your estimated monthly income.
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Enter the principal limit from your HECM quote to see your results. Age, home value, mortgage balance, term and closing costs start with example amounts; replace them with yours.
You and your home
HUD requires HECM borrowers to be 62 or older.
From your HECM quote
The total amount the quote says you can borrow, before payoffs and costs. HUD sets it from age, the expected rate and the maximum claim amount.
Origination, title, appraisal and other charges from your quote. The 2% upfront MIP is added for you.
Enter your principal limit
Estimates only — not a commitment to lend or a HECM quote. Jim Blackburn, NMLS #1072866.
How Reverse Mortgage Income Is Figured
A HECM doesn't pay a set percentage of your home's value. HUD starts with the maximum claim amount, which is the lesser of your home's value and the national limit ($1,249,125 for 2026). The lender then applies a principal limit factor based on the youngest borrower's age and the expected interest rate. That gives the principal limit shown on your quote.
Before any income is paid, the principal limit has to cover what's owed at closing: an existing mortgage, closing costs and the 2% upfront mortgage insurance premium. What remains is the net principal limit, and that's the pool your monthly income comes from.
Example: a $450,000 home is below the HUD limit, so the maximum claim amount is $450,000 and the upfront MIP is $9,000. If the quote shows a $200,000 principal limit, subtract an $80,000 mortgage payoff, $8,000 in closing costs and the $9,000 MIP: $103,000 is left. Spread over a 10-year term, that's about $858 a month before the growth HUD builds into term payments.
Tenure, Term or Line of Credit: Which Payout Fits?
- Tenure. Equal monthly payments for as long as at least one borrower lives in the home as a principal residence. The monthly amount is usually smaller than a term payment because it isn't tied to an end date.
- Term. Equal monthly payments for the number of months you pick. A shorter term means larger payments that stop when the term ends. This calculator divides the net principal limit by the months in your term. Your lender's figure is usually somewhat higher, because HUD's formula accounts for interest on the money you haven't drawn yet.
- Line of credit. You draw when you need money, and you're charged interest and MIP only on what you've drawn. On an adjustable-rate HECM, the unused credit line grows over time.
HUD also allows modified tenure and modified term, which combine monthly payments with a line of credit. A single lump sum is available only on a fixed-rate HECM.
Why the First Year Has a Cap
HUD limits how much you can take at closing and during the first 12 months. The cap is the greater of 60% of the principal limit, or your mandatory obligations plus 10% of the principal limit. Mandatory obligations include paying off an existing mortgage and the closing costs. If paying off your mortgage uses most of your principal limit, the first-year amount can be small even when the net principal limit is large. The rest opens up after month 12.
What You Still Pay With a Reverse Mortgage
A reverse mortgage removes the monthly mortgage payment, but not the cost of owning the home. You still pay property taxes, homeowners insurance and any HOA dues, keep the home in repair, and live there as your principal residence. HUD requires counseling with a HUD-approved HECM counselor before you apply. If the lender's financial assessment shows these charges could be hard to keep up with, part of the principal limit may be set aside to pay them, which reduces the income you can take.
Frequently Asked Questions
How much monthly income can I get from a reverse mortgage (HECM)?
It depends on the principal limit on your HECM quote, which is set by the age of the youngest borrower (or eligible non-borrowing spouse), the expected interest rate and the lesser of your home's value or HUD's limit. From that amount, subtract any existing mortgage payoff, closing costs and the 2% upfront mortgage insurance premium. What's left is the net principal limit, and a term payout divides it into equal monthly payments for the number of years you choose.
What is the 2026 HECM limit?
For FHA case numbers assigned on or after January 1, 2026, the HECM maximum claim amount limit is $1,249,125 nationwide (HUD announcement of December 11, 2025). A home worth more than that is counted at $1,249,125 when the principal limit is figured.
What is the difference between tenure and term reverse mortgage income?
A tenure payout pays equal monthly amounts for as long as at least one borrower lives in the home as a principal residence. A term payout pays equal monthly amounts for a fixed number of months you choose, so each payment is usually larger than a tenure payment from the same principal limit, but the payments stop when the term ends. Either way, the loan is not due while you live in the home and meet the loan terms.
Why won't this calculator show a HECM tenure payment?
HUD's tenure formula uses the loan's expected interest rate and the youngest borrower's age, and this page doesn't use rates. Ask the lender for the tenure figure on your quote. You can enter the quote's principal limit here to check the other numbers.
How much of my HECM can I take in the first year?
Under HUD Mortgagee Letter 2013-27, the most you can receive at closing and during the first 12 months is the greater of 60% of the principal limit, or your mandatory obligations (such as paying off an existing mortgage and closing costs) plus 10% of the principal limit. The rest becomes available after the first year.
What does HECM mortgage insurance cost?
The upfront mortgage insurance premium is 2% of the maximum claim amount, usually financed into the loan. The annual premium is 0.5% of the outstanding loan balance and is added to the balance over time (HUD Mortgagee Letter 2017-12).
Do I still pay property taxes with reverse mortgage income?
Yes. HECM borrowers must keep paying property taxes, homeowners insurance and any HOA dues, keep the home in good repair, and live in it as a principal residence. Falling behind on these charges can make the loan due.
Is reverse mortgage income taxable?
Reverse mortgage payments are loan proceeds, not earnings, and are generally not treated as taxable income. Your situation can differ, especially for means-tested benefits, so confirm with a tax professional before you rely on HECM income.
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Important Disclaimer
This calculator illustrates Home Equity Conversion Mortgage (HECM) math using the numbers you enter. It does not calculate a principal limit or a tenure payment; those come from your lender's HECM quote. Term income shown here is a simplified estimate (net principal limit divided by the months in the term) and will differ from a lender's figure. Sources, checked October 30, 2026: 2026 HECM maximum claim amount limit of $1,249,125 for FHA case numbers assigned on or after January 1, 2026 (HUD press release No. 25-145, December 11, 2025, and Mortgagee Letter 2025-22); initial MIP of 2.00% of the maximum claim amount and annual MIP of 0.50% of the outstanding balance (HUD Mortgagee Letter 2017-12, August 29, 2017); first 12-month disbursement limit (HUD Mortgagee Letter 2013-27, September 3, 2013); payment plan options (24 CFR 206.19); age, residence, counseling and property charge requirements (HUD HECM program page, hud.gov). This is not a loan approval, a HECM quote or a commitment to lend. All borrowers must qualify based on HUD, lender and property guidelines. Jim Blackburn, NMLS #1072866. Equal Housing Opportunity.