Reverse mortgage amortization calculator: balance over time

A reverse mortgage amortization schedule projects the loan balance year by year as interest and the 0.5% annual FHA mortgage insurance premium accrue against an unpaid balance, with the federal non-recourse cap (24 CFR §206.125) limiting what the borrower or heirs can owe to 95% of appraised value at payoff. Enter age, home value, expected rate, and starting draw. The output is a year-by-year amortization schedule: each row shows the opening balance, accrued interest, accrued mortgage insurance, and ending balance through the loan's expected horizon. No email, no phone, no SSN.

What are you looking at?

A reverse mortgage compounds. Unlike a forward mortgage, where each monthly payment reduces principal and the balance shrinks, an HECM accrues interest and mortgage insurance to the loan balance every month. The borrower owes more in year ten than in year one, more in year twenty than in year ten, until the loan becomes due and payable. The schedule above shows that growth on the inputs entered: each year's interest is the note rate times the prior balance, plus 0.5% of the prior balance for the annual MIP (FHA Single Family Housing Policy Handbook 4000.1 §II.B.10). The compounding is the part most reverse-mortgage marketing softens. The schedule is the math without the softening.

The loan grows on a known rate and the home does not

The loan balance grows on a known rate. The home's value does not. Whether the borrower's equity erodes, holds, or grows over time depends on the spread between the note rate (interest plus MIP) and the home's appreciation. At a 6.5% note rate plus 0.5% MIP (7.0% total accrual) against a home appreciating at 4.0% per year, the loan compounds faster than the home, and equity declines. At the same note rate against a home appreciating at 8.0% per year, equity grows. The amortization above shows the loan side; a side-by-side equity projection requires an appreciation assumption that the calculator does not impose, because reasonable people disagree on the right number to use for any given metro.

The non-recourse cap is what limits the downside

If the loan balance exceeds the home's value at the time the loan becomes due, the heirs are not liable for the difference. HECM is a non-recourse loan: at maturity, the lender's recovery is capped at 95% of the home's appraised value (or the full loan balance if the home is worth more), and FHA insurance covers the rest. This is the statutory protection at 12 USC §1715z-20 and the operational rule at FHA Handbook §II.B.7 (claim filing). It is also the reason the FHA charges the upfront and annual MIP: the insurance fund absorbs the lender's loss when the compounded balance overtakes the home's value, which is the mathematically expected outcome on long-tenure loans against modestly appreciating homes.

What triggers maturity and ends the schedule

The schedule runs until a maturity event makes the loan due and payable. The FHA-defined maturity events are: the last surviving borrower dies; the borrower sells the home or otherwise conveys title; the home stops being the borrower's principal residence (typically a 12-consecutive-month absence, often a move to a care facility); the borrower fails to pay property taxes or hazard insurance; or the borrower fails to maintain the property to FHA standards (FHA Handbook 4000.1 §II.B.9). At any of these events, the lender is repaid from sale proceeds, refinance, or the FHA insurance claim. The schedule above does not predict when maturity occurs; it projects what the balance looks like at each year if the loan is still active.

Frequently asked questions

Next step: compare reverse-mortgage programs for parameter cards on each lender, or read the methodology if the math above needs more context.

Last reviewed 2026-05-20