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Reverse Mortgage Purchase Calculator

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Reverse Mortgage for Purchase Calculator

The minimum qualifying age for a reverse mortgage is 62

Don’t forget to include your spouse’s age, even if they are not yet 62, as loan proceeds are always based on the age of the youngest spouse.
Your Age
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From America's #1 Rated Reverse Mortgage Lender

Welcome to our Reverse Mortgage Purchase Calculator, designed specifically for seniors considering a new home purchase.  With ARLO™, you can quickly access real-time rates and down payment requirements.  Our calculator simplifies the process of using a reverse mortgage to purchase your next home, ensuring you have all the necessary information at your fingertips.

Ideal for retirees planning to relocate, family members assisting with housing decisions, or anyone interested in understanding how to leverage a reverse mortgage for purchasing a home, our HECM (Home Equity Conversion Mortgage) calculator is here to guide you through your choices with clarity and precision.

Understanding Our Reverse Mortgage Purchase Calculator: A Step-by-Step Guide

  • Input: Enter your age and the new home’s purchase price.
  • Estimating Borrowing Amount: The calculator uses this information to estimate how much you can borrow with a reverse mortgage.  This amount, combined with your down payment, helps determine the price range of homes you can afford.
  • Factors in Calculation: The calculation considers factors like current interest rates, your age (and your spouse’s age, if applicable), and the sale price.
  • No Monthly Mortgage Payments: With a reverse mortgage, you don’t have to make monthly mortgage payments.  The loan balance is due when you sell the home, move out permanently, or pass away.
  • Amortization Schedules: The calculator also shows how much equity you might retain in your new home after getting the reverse mortgage.


Important Notes:

  • The calculator provides an estimate.  Actual reverse mortgage terms can vary based on individual circumstances and lender policies.  Additionally, the seller has the right to choose the title company during the home purchase process, which can impact the final closing costs.  It is essential to consult with your lender and real estate professional to understand all potential costs and terms specific to your situation.
  • Consider the long-term implications of a reverse mortgage, including the impact on your estate and home equity.
  • Consult with a financial advisor or a reverse mortgage counselor before making any decisions.

Benefits of Choosing a Reverse Mortgage to Buy Your Next Home

As people age, many find they need or want to move but face income limitations that make a conventional loan difficult.  This often limits their options to an all-cash purchase, narrowing their choices.

Common Reasons for Moving:

  • Retirement communities
  • Proximity to family or friends
  • Homes that meet medical needs or are more accessible
  • Single-story homes or homes with smaller lots

A reverse mortgage can help.  It allows borrowers to sell their current home and purchase a new one that better suits their needs without monthly mortgage payments.  This can be especially helpful for those looking to eliminate monthly payments and reduce maintenance.

With a reverse mortgage, you can finance roughly half the purchase price of your new home (sometimes more or less, depending on the youngest borrower’s age) without a monthly fee.  This flexibility enables borrowers to move into a home that meets their current needs or one they can afford.


Your down payment for a reverse mortgage comes from your savings or the sale of another property.  It can be funded through proceeds from real estate sales, personal property sales, or cash on hand, including 401k, stocks, savings, bonds, etc.  Gift funds from family are also acceptable.

With a reverse mortgage, you only need to cover part of the purchase price, allowing you to afford a more expensive home without monthly mortgage payments.  This flexibility can enable you to buy the home you need, even if it initially seemed out of reach.


HECM Purchase Down Payment Estimates by Age and Home Value

Age% Down$200,000$400,000$600,000$800,000$1,00,0000
62 67.2%$134,400$268,800$403,200$537,600$672,000
65 65.1%$130,200$260,400$390,600$520,800$651,000
75 58.5%$117,000$234,000$351,000$468,000$585,000
80 54.1%$108,200$216,400$324,600$432,800$541,000
85 47.9%$95,800$163,600$287,400$383,200$479,900
90 40.9%$81,800$163,600$245,400$327,200$400,900
Please note that this is not a lending offer. The down payment figures provided are estimates, inclusive of the majority of essential closing costs, such as a 2% upfront mortgage insurance fee and third-party closing costs. These estimates are based on an interest rate of 6.93%, which includes an expected rate of 6.10% and an adjustable CMT margin of 1.625%, accurate as of December 4, 2023.


Frequently Asked Questions


What is a reverse mortgage for a home purchase?

A reverse mortgage for purchase allows you to buy a home using a reverse mortgage instead of a traditional loan.  This program lets you purchase a property without making monthly mortgage payments.  However, you are still responsible for property maintenance, timely payment of taxes, insurance, and any property charges like HOA dues.

What is the downside of buying a home with a reverse mortgage transaction?

There aren’t significant “downsides” to purchasing with a reverse mortgage, but it’s crucial to ensure that the borrower, property, and transaction meet HUD program requirements.  If your transaction doesn’t meet these guidelines, it won’t work.  HUD has specific rules for borrower requirements, property types, fees, and procedures.  Choosing the right lender familiar with HUD’s program can help avoid frustration by ensuring everything meets guidelines from the start.

What is the required down payment for a reverse mortgage purchase?

The required down payment depends on several factors:

  • Age: The older you are, the more money you can receive as a percentage of the home’s value.
  • Property Value: More expensive homes require a higher down payment.  Homes valued over the HUD lending limit of $1,149,825 won’t receive additional benefits.
  • Interest Rates: Higher interest rates (over 3%) reduce the loan amount you can receive.
  • Location: States with higher closing costs (e.g., Florida, Washington, New York, Pennsylvania, New Jersey) will require a higher down payment.

How is a HECM purchase amount calculated?

The purchase price is agreed upon by you and the seller.  Lenders use the HUD reverse mortgage calculator to determine your loan amount based on your age, interest rates, property value or purchase price, and the HUD maximum limit.  The loan also requires HUD/FHA insurance, so the lender must follow HUD guidelines and requirements.

Is it hard to qualify for a reverse mortgage purchase?

Qualifying for a reverse mortgage purchase is generally straightforward.  Experienced lenders can usually determine your qualifications in advance based on known income and asset requirements.  While unexpected issues can arise, such as property-specific problems, HUD’s requirements are manageable for borrowers with good credit and adequate income.  HUD uses the residual income method, which is one of the easiest income qualification methods.

Working with a Realtor?

Please contact us if you’re ready to make an offer on a property and need assistance explaining the reverse mortgage purchase program to Realtors and sellers.  We can help clarify how the program works and its benefits for all parties involved.

There are specific requirements for reverse mortgage purchases, so we encourage you to reach out before making your offer.  This ensures that you and your real estate professional are fully informed and up-to-date on all requirements in advance.


Additional Resources:

Author Michael Branson
About the Author, Michael G. Branson |
Michael G. Branson CEO, All Reverse Mortgage, Inc. and moderator of ARLO™ has 45 years of experience in the mortgage banking industry. He has devoted the past 19 years to reverse mortgages exclusively.