Reverse Mortgage Calculator

Our reverse mortgage calculator helps you see how much you can borrow from a reverse mortgage, the growth of your loan balance and what your remaining home equity might look like in the future.

What is a reverse mortgage?

A reverse mortgage, just as the name suggests, is completely different from a regular mortgage. It is a loan that allows homeowners, typically seniors aged 60 and above, to convert a portion of their home equity to cash without having to sell their property. Here, you don’t make payments to the bank or lender; it’s the lender who pays you. Basically, you get money in exchange for the value of your home. You can use this amount however you like, whether to supplement your retirement income, pay for living expenses, medical costs or home renovations.

How does a reverse mortgage work?

The concept is simple: you borrow against the value of your home, and your house acts as security for the loan. Unlike with regular mortgages, where you need to make periodic repayments, you are not obliged to such regulations; unless you yourself want to, you don’t have to make regular repayments. The interest and fees are added to your loan balance over time. The loan amount and accumulated interest are usually repaid when you sell your home, happen to move out permanently, or pass away. When that happens, the profits from selling your home are used to pay off the loan, and any remaining funds belong to you.

How much can you borrow?

The amount you can borrow usually depends on your age; some seniors aged 60 might be able to borrow close to 15-20% of their home’s value, while someone older might borrow 30-40%. Different lenders have different policies what they choose to provide hits the final nail. The property value also makes a huge difference. You will never get more than your home’s worth.

How to calculate a reverse mortgage?

Our reverse mortgage calculator simplifies the process by guiding you through three easy steps. You begin by entering key details to estimate how much you may be able to borrow. Next, you specify how you want to receive your funds. Through monthly payments, lump sum payments or a combination. Finally, you need the financial details related to your home and loan.

Once all the information is entered, the calculator provides a detailed breakdown including the total lump sum payment, total monthly payments received, total loan amount over time, the loan-to-value ratio (LVR) and the estimate of when your home equity could reach zero.