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A reverse mortgage converts home equity into monthly payments without requiring repayment during the borrower's occupancy. The advance rate rises with age because the expected term is shorter, and interest accrues on the growing balance.
Reverse mortgage
Eligible = value × LTV (rising with age); monthly = eligible / [((1+r)^n - 1)/r]
Figures are estimates for planning only. Prices, returns, inflation and personal circumstances all change. This is not financial or tax advice — speak to a qualified adviser before making decisions.
It is settled from the property on sale, usually after the borrower's death or permanent move, with heirs able to redeem it.
Because interest compounds on every payment made for the whole remaining term, which limits what the equity can support.