All Reverse Mortgage, Inc. (ARLO™) has created a new reverse mortgage amortization calculator that helps you understand how your loan will change over time.

With the amortization calculator below, you can:

  • Choose how much to borrow or repay.
  • Instantly see how this affects your loan balance and credit line.
  • Adjust for future interest rates, home value changes, and payment plans.

Welcome to our Amortization Calculator

Home Information
% (Annually)
Loan Information

Rate Information Info
Annual Advances and Repayments Payment info
Change your interest rate over time to see how it affects the loan amortization.
Years   1-2 3-4 5-6 7-8 9-10 11-12 13-16 17-20
Monthly Interest Rate   % % % % % % % %
Monthly Insurance Rate(MIP)   0.5%0.5%0.5%0.5%0.5%0.5%0.5%0.5%
Combined Interest Rate  
If you plan on taking a yearly payment from your credit line or making a repayment towards your loan balance, add the figures here.
Annual Advance Annual Repayment
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Annual Advance Annual Repayment
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Amortization Table  
Year   Accrued Interest Accrued MIP Loan Balance Estimated Home Value Remaining Home Equity Available Credit Line

Benefits of Making Payments on a Reverse Mortgage

Have you considered the advantages of a reverse mortgage compared to a traditional loan? Do you consider reverse mortgages a last resort option?  If you believe getting a reverse mortgage means losing all your home equity, it’s time to rethink.  A reverse mortgage can offer benefits that go beyond those of traditional loans.

One important feature of reverse mortgages is that there are no prepayment penalties.  This means you can make payments anytime without being required to.  You can get a reverse mortgage that doesn’t require monthly payments, but you can still choose to make payments to reduce your loan balance over time.

Homeowners can make partial repayments in different ways.  Some choose to pay an amount each month that keeps the loan balance the same as when they first borrowed. Others pay more, aiming to fully repay the loan eventually.  This flexibility allows you to manage your finances in the best way for you.

Now, one might ask:

Why would I get a Reverse Mortgage if I am going to make payments?

People across the country are increasingly opting for reverse mortgages for various reasons.  Compared to traditional loans, reverse mortgages have more lenient qualification criteria regarding income and credit requirements.

Individuals on a fixed income or those unable to traditionally verify their income might find it challenging to qualify for a conventional loan.  However, the current guidelines for reverse mortgages do not impose income requirements, and the credit criteria are minimal, making it significantly easier to qualify for this financial product.

And there is another very important reason people like to use a reverse mortgage even when they intend to make payments.  There is never a monthly payment requiredmeaning you can make a payment when or if you want, in the amount you want, or not at all.  You choose when the timing is right or convenient for you to make a payment if you desire to do so.

This is huge for people who have income or expenses that fluctuate.  Or if it is just not convenient for you to make the payment in any given month due to life events such as family emergencies, birthdays, anniversaries, graduations, births of grandchildren, needed repairs, vacations, or whatever life throws at you, you can skip it any time you decide to and there are no negative consequences.  If you skip payments on a forward loan, it can adversely affect your credit or worse.

Amortization FAQs


How is a reverse mortgage calculated?

A reverse mortgage is calculated using the age of the youngest borrower (or spouse) and the expected interest rate.  These factors determine the loan-to-value percentage you can get.  This percentage is applied to your home value to find out your principal limit and total loan amount.


Does interest accrue on a reverse mortgage?

Yes.  A reverse mortgage doesn’t need monthly payments.  Interest is added to the loan balance, so the amount you owe increases over time.  However, you can choose to make payments anytime to reduce the balance.


Does a reverse mortgage have negative amortization?

Yes.  Unlike a traditional loan where the balance goes down with each payment, a reverse mortgage adds interest to the loan balance each month, making it go up.  You can stop this by making interest-only payments.


How is compound interest calculated on a reverse mortgage?

If you don’t pay the interest on a reverse mortgage, it gets added to the loan balance.  The next month, interest is charged on the new balance.  This is called compound interest.


Is interest on a reverse mortgage tax deductible?

Interest is deductible when you repay it.  If you don’t make payments, you won’t pay interest for that year.  If you make voluntary payments, you might get a tax deduction.  Note that payments first cover Mortgage Insurance Premiums before interest.  Always consult your tax professional.