Free Reverse Mortgage Amortization Calculator

May 16, 2024

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 Reverse Mortgage Amortization Calculator

Home Information

Home Value

Home Appreciation

% (Annually)

Loan Information

Line of Credit

Loan Balance

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
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10

	Annual Advance	Annual Repayment
Year 11
Year 12
Year 13
Year 14
Year 15
Year 16
Year 17
Year 18
Year 19
Year 20

Amortization Table

Year

Accrued Interest

Accrued MIP

Loan Balance

Estimated Home Value

Remaining Home Equity

Available Credit Line

Need an Excel version? Download the full amortization calculator as an Excel file here.

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 they do not have prepayment penalties. This means you can make payments at any time 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 enables you to manage your finances in the most effective 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.

Qualifying for a reverse mortgage is generally easier than for a traditional forward loan, but there are income and credit guidelines. Reverse mortgages don’t use the strict debt-to-income ratios that conventional loans require. Instead, lenders apply a residual income test, making sure you have enough money left over each month, after typical living expenses, to cover property charges like taxes, insurance, and maintenance.

Even if your income is lower, there are flexible ways to qualify. For example, you can offset a shortfall in residual income with certain compensating factors, such as strong credit history, significant cash reserves, or by setting aside a portion of the loan to pay property charges. This approach is often far more manageable for homeowners on fixed incomes compared to the rigid ratio requirements of conventional mortgages.

Tip: Not sure if you’ll meet the residual income test? At All Reverse Mortgage, we can run a quick, no-obligation review using your actual income and expenses. We’ll show you if you qualify as is or explain simple options, such as setting aside funds, to help you meet the requirement and move forward with confidence.

2025 Reverse Mortgage Amortization Calculator: What Makes ARLO Stand Out

Feature	What ARLO™ Offers
Full Amortization Forecast	See your loan balance, home equity, and credit line over 20 years
Custom Repayment Flexibility	Add optional monthly or lump-sum payments to see how they reduce your balance
Interest Rate Adjustments	Project your future loan performance based on changing interest rates
Home Appreciation Modeling	Include annual growth rates to estimate future equity and property value
Side-by-Side Impact View	Compare outcomes with or without voluntary repayments
Excel Download Option	Request a downloadable version to keep or share with family or advisors
No Monthly Payment Required	Enjoy total flexibility—you decide if, when, and how much you want to repay

See How Your Reverse Mortgage Grows or Shrinks Over Time. Whether you’re planning to make monthly payments or want to track how interest affects your equity, ARLO™ puts you in control. Our amortization calculator shows how your loan evolves, with or without repayments. Call us Toll-Free at (800) 565-1722 to speak with an expert, or use our reverse mortgage amortization calculator to explore every option—clear, flexible, and designed to fit your retirement.

Frequently Asked Questions

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 at any time to reduce your balance.

Does a reverse mortgage have negative amortization?

Yes. Unlike a traditional loan, where the balance decreases with each payment, a reverse mortgage adds interest to the loan balance each month, resulting in an increase in the loan balance. 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 following 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 is paid. *Always consult your tax professional.

Want to understand how your loan balance changes over time? See our detailed guide on how the reverse mortgage amortization schedule works.

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Have a Question About Reverse Mortgages?

Look no further. Michael G. Branson, our CEO, brings a wealth of knowledge directly to you. With a robust 45-year tenure in mortgage banking and 20 years dedicated solely to reverse mortgages, he's the expert you want on your side.

Post your question in the comments below and anticipate a personalized response from Mr. Branson himself, typically within one business day. He's here to illuminate all angles of reverse mortgages, ensuring you're equipped with the knowledge to make informed decisions. Take this opportunity to gain insights from a seasoned professional.

7 Comments on this Article

John L. PhD
May 13th, 2024

My wife will be 80 years old this year. I just turned 76. Our credit rating is 820. We want to repair our inground pool and enclose that area in screening. We would need $75,000 to do this. Our house is worth $475,000, and we have no mortgage. All the so-called calculators for HECM loans produce the amount you can borrow. I don't want to know that; I want to know the costs of the loan going forward. I am very handy with Excel are there any examples of all the items needed to calculate the loan costs over time? I like your website and its approach to providing facts, not salesmanship.
Reply to John
- Michael Branson
  May 13th, 2024
  
  Hello John,
  You can use the HECM amortization calculator on this page and by inserting only an initial draw of $75,000, the calculator will give you the results of the loan with all the exact costs pursuant to the standard HUD formulas-if that works for you. Given your familiarity and expertise with Excel, I would suggest that after you get the HUD standard results, if you are ok with the amounts the loan will make available to you and the costs to get the loan, you request a copy of the All Reverse proprietary amortization calculator. We developed This calculator upon which we will load the initial figures based on your calculator results and then send you the Excel version of the calculator that allows you to do some neat things the HUD calculator does not.
  Our calculator will allow you to input future draws and repayments so you can see what will happen if you choose to take additional money out later or make repayments on your loan. After all, there are no payments required on a reverse mortgage for as long as you live in the home and abide by the loan terms (pay the taxes, insurance and maintain the home in a reasonable manner) but some people do choose to make payments to keep the balance from growing. You can also change the interest rates on our calculator, which the HUD calculator will not do. No one can accurately predict future interest rates, and the loan results in the long run will depend on future rates and your own borrowing habits. But with the ability to adjust the factors that really affect the loan going forward, you will have a very good idea of how the loan can be affected based on different changes.
  Reply to Michael
  - Steve
    June 15th, 2025
    
    We took out a HECM on 9/30/24. Our plan is to withdraw $24k for 2 years, starting in Oct., 2025. I know all of our current values, just unsure of what year(s) to enter the $24k in the Amortization chart? Thx - Steve
    Reply to Steve
    - Michael Branson
      June 15th, 2025
      
      Hi Steve,
      Thanks for your comment and congratulations on setting up your HECM!
      To answer your question about when to enter the $24,000 annual withdrawals in the Amortization Chart:
      Since your plan is to begin withdrawals in October 2025, you'll want to input the $24,000 per year for the second and third years of the amortization schedule, based on your loan starting in September 2024.
      So, in the calculator:
      Under Annual Advances, enter $24,000 for Years 2 and 3, and $0 for all other years unless you plan additional draws later.
      Reply to Michael
Bill T.
January 11th, 2024

If I borrow $200,000 at 6% what is the exact dollar amount I must pay back in 10 years? What extra fees?
Reply to Bill
- Michael Branson
  February 6th, 2024
  
  Hi Bill,
  There are different ways you can borrow the funds and different programs available that allow you to either take a portion of the funds as you need them, a lump sum draw or monthly payments. The only program. That allows you to take a portion of your Principal Limit (your benefit available to you) in the adjustable-rate program, and then the rate fluctuates as the interest rates change.
  The fixed-rate loan requires that you take a full draw of the proceeds available to you, and then there are no further draws available to you, whereas the line of credit or adjustable rate program would allow you to take the amount of money you desire and then if you have more money available you can choose to leave it on the line and never use it or use it later if you want, but you do not accrue interest on funds you do use.
  HUD caps the amount you can draw on both programs at 60% of the program's available proceeds at the initial draw or in the first 12 months unless the funds are needed to pay off existing loans or used to purchase a property. With the fixed rate, no additional draws are available after the first draw, though, so you would lose access to 40% of your available loan proceeds if you were not paying off existing loans.
  To make a long story short, the best way to determine your costs, which program might give you what you need, and what the amortization schedule would look like is to visit our calculator. You can compare the programs and the costs, view the amortization schedules, and see if it works for your circumstances, as your age and your location will also be factors that will affect those numbers. There is no cost and no obligation, and never any personal information (like social security number or anything like that) is needed to find out if it's right for you.
  Reply to Michael
  - Steve
    August 6th, 2025
    
    Hello, When I copy and download my reverse mortgage information, it automatically reverts to / changes my entered values to this in the Home Info. section:
    
    Home Information:
    
    Home Value
    $300,000
    
    Home Appreciation
    4.00% (Annually)
    
    Loan Information:
    
    Line of Credit
    $100,000
    
    Loan Balance
    $100,000
    
    I'm entering the following values for my reverse mortgage and need these to carry over:
    
    Home Information:
    
    Home Value
    $658,000
    
    Home Appreciation
    4.00% (Annually)
    
    Loan Information
    
    Line of Credit
    $237,394
    
    Loan Balance
    $31,375
    
    Any help you can provide would be greatly appreciated. Thank you.
    
    Steve
    Reply to Steve

AMORTIZATION CALCULATOR

ARLO™

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