Reverse Mortgage Refinance Calculator

Q: How does refinancing a reverse mortgage work with the insurance premium initially paid?

When you refinance a reverse mortgage loan, you get credit for the mortgage insurance premium paid on the previous loan. The current HUD formula for mortgage insurance on a refinance is the current max claim minus the previous max claim times 3%. For example, let's say you did your first reverse mortgage loan at a home value of $400,000 and paid 2% in upfront mortgage insurance premium ($8,000). If you are refinancing with a home value now of $600,000, you will take ($600,000-$400,000 = $200,000 x 3% = $6,000). In this instance, the amount paid on the first reverse mortgage would exceed the amount due on the new loan, and therefore, the customer would pay $0 in upfront mortgage insurance to refinance their loan.

Table of Contents

• Why Use Our Reverse Mortgage Refinance Calculator

• How to Use the Calculator

• Evaluating the Pros and Cons of Refinancing a Reverse Mortgage

• Deciding If Refinancing Makes Sense

• Refi FAQs

• Guide to All Reverse Mortgage Calculators

Why Use Our Reverse Mortgage Refinance Calculator

If you already have a reverse mortgage, refinancing could let you:

Access more cash if your home’s value has increased.
Lock in a lower interest rate or margin than your current loan.
Add a spouse to the loan so both homeowners stay protected.

This calculator is built by All Reverse Mortgage, Inc., America’s #1 rated reverse mortgage lender with 20+ years of experience. You’ll receive an instant quote including eligibility, real-time rates/APR, and detailed refinance comparisons.

How to Use the Calculator

Input Current Reverse Mortgage Info: Enter details of your existing reverse mortgage. This includes the original amount borrowed and your current loan balance. This data is crucial for an accurate refinance assessment.
Estimated Home Value: Provide your home’s estimated market value. This figure is important because it determines the equity available and influences the refinancing benefits you could gain, especially if your home’s value has increased significantly since your original reverse mortgage.
Age of the Youngest Borrower: In reverse mortgage calculations, the age of the youngest borrower is key, as it impacts the borrowing amount, with age playing a significant role in determining your new principal lending limit.
Reverse Mortgage Results: The results from the calculator offer a comprehensive comparison between your current reverse mortgage and the potential new HECM. This comparison highlights key differences in the availability of equity, interest rates, and borrowing limits.
Informed Decision-Making: Armed with these insights, you can make a more informed decision about the financial viability of refinancing. While this calculator provides valuable estimates, seeking advice from a financial advisor or a reverse mortgage counselor is recommended for a more personalized analysis.

Tip: Our calculator automatically factors the HUD refinance credit for the upfront mortgage insurance premium (MIP) you’ve already paid.

Evaluating the Pros and Cons of Refinancing a Reverse Mortgage

Refinancing a reverse mortgage is particularly advantageous if it offers significant benefits such as improved terms, an increased borrowing limit due to a rise in home value, or lower interest rates.

However, it’s important to weigh these benefits against any associated costs and consider how they align with your long-term financial goals and estate planning strategies. All Reverse Mortgage’s refinance calculator is designed to guide you through this decision-making process.

Deciding If Refinancing Makes Sense

A refinance can be worthwhile when:

Your home has appreciated since the original reverse mortgage.
Rates are lower than what you locked previously.
You want to add a spouse or adjust payout terms.

But consider:

Closing costs — including any new or partial MIP due (our tool estimates this credit).
Your long-term plan — how long you’ll stay in the home and your estate goals.

If you’re considering refinancing, run your numbers first. Our Reverse Mortgage Refinance Calculator shows real-time rates, limits, and refi options. Or call (800) 565-1722 to speak with an experienced, licensed specialist.

Refi FAQs

How does a reverse mortgage refinance calculator work?

A reverse mortgage refinance calculator is similar to the standard reverse mortgage calculator in that it utilizes the home value, age of the youngest borrower or spouse, and current interest rates to determine the maximum loan amount available. A reverse mortgage refinance calculator differs because it must consider the Mortgage Insurance Premium paid on the previous loan and the available funds for the existing loan to determine if a net tangible benefit can be achieved with a new refinance.

When is it a good idea to refinance my reverse mortgage?

It is a good idea to refinance your reverse mortgage when you can receive a significant benefit. A significant benefit would be the added available proceeds or a significant reduction in the loan interest rate.

Would refinancing my reverse mortgage trigger any tax deductions?

You should always consult your tax professional when determining if a refinance of your reverse mortgage could trigger any tax deductions.

Is it ever a good idea to refinance a HECM into a proprietary reverse mortgage?

There are instances when refinancing an HECM into a proprietary reverse mortgage could be a good idea. The HECM program has a maximum claim amount set by HUD, which, for the year 2025, is currently $1,209,750. Any home value above and beyond that limit does not factor into your available loan amount. If you have a home worth significantly north of the HUD limit, refinancing to a proprietary loan would allow you to borrow significantly more money than the HECM program will.

How does refinancing a reverse mortgage work with the insurance premium I already paid?

When you refinance an FHA-insured reverse mortgage (HECM), you don’t start over on the mortgage insurance you’ve already paid. HUD’s rules let you get credit for the upfront mortgage insurance premium (IMIP) from your original loan.

Here’s how it works:

When you take out a new HECM to replace an old one, HUD compares the Maximum Claim Amount (MCA) — essentially the home value cap used for insurance from your first loan to the new refinance.
The new upfront insurance is usually 2% of the new MCA. But before you pay anything, HUD runs a “refinance test.”
This test looks at the increase in your home’s value since your first loan and limits the new MIP to no more than 3% of the increase minus what you already paid on the old loan.

If the credit from your first MIP is large enough, you may owe little or nothing new in upfront insurance.

Example:
Suppose your original reverse mortgage was based on a $400,000 value and you paid $8,000 in upfront MIP (2%). Your home is now worth $600,000.

Standard new upfront MIP would be $600,000 × 2% = $12,000.
HUD’s refinance test caps new MIP at 3% of the increase: $600,000 − $400,000 = $200,000 × 3% = $6,000, minus the $8,000 you already paid = negative $2,000.
Because the result is negative, you owe $0 new upfront MIP on the refinance. (HUD doesn’t refund the extra you paid before, but you won’t pay more now.)

This credit is automatic. It’s built into the FHA refinance process and protects homeowners from having to pay insurance twice when they refinance their reverse mortgage.

Guide to All Reverse Mortgage Calculators

Type of Calculator	Purpose	Features	Includes Rates/APR
Reverse Mortgage Refinance Calculator	HECM to HECM Refinance Analysis, HECM to Jumbo Refinance options when available	Assists in Evaluating Whether Refinancing Your Existing Reverse Mortgage is Advantageous, Considering Current Home Value, Interest Rates, and the 5x Benefit Rule	No
Reverse Mortgage Line of Credit Calculator	Specialized Tool for Estimating HECM Line of Credit and Simulating Credit Line Growth Rates	Estimates Your Available Credit Line from a Reverse Mortgage and Projects Its Growth Over Time.	No
Reverse Mortgage Amortization Calculator	Loan Balance and Equity Simulator, Negative Amortization Schedules	Offers a Comprehensive Analysis of Loan Balance, Equity, and Accrued Interest Changes Throughout the Life of a Reverse Mortgage, Complete with an Excel File for Personal Tracking	Yes
All Reverse Mortgage Calculator	Detailed Calculations for Monthly Payments, Single Lump-Sum Disbursement, and Line of Credit Options	Calculation of What You Could Get from a Home Equity Conversion Mortgage (HECM) or Jumbo/Proprietary Reverse Mortgages	Yes
Reverse Mortgage for Purchase Calculator	HECM for Purchase	Calculates the Funds Needed to Buy a New Home with a Reverse Mortgage, Taking into Account Your Down Payment and Net Income from the Sale of Your Current Home	Yes

This chart outlines the variety of calculators from All Reverse Mortgage, tailored to your needs for reverse mortgages. It's arranged with four easy-to-understand sections: the type of calculator, its purpose, its features, and information on whether it includes rates and APR details.

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