Reverse Mortgage Calculator

What the Reverse Mortgage Calculator does

A reverse mortgage lets a homeowner aged 55 or older borrow against home equity without making regular payments — interest accrues instead of being paid down, and the loan becomes due when the last owner sells, moves out permanently, or passes away. This calculator shows what you could access today, and then does something most reverse mortgage marketing avoids: it projects the balance forward, honestly, alongside the home's value.

The result families actually care about is not the amount available today — it is what is realistically left over. This page is built around that question, for the homeowner and for the adult children who are usually part of this decision too.

• Maximum available amount and net cash to you after paying off any existing mortgage
• A year-by-year balance projection that compounds honestly, since no payments are made
• Remaining equity — home value minus loan balance — projected forward, including at ages 85 and 90
• A sensitivity grid showing how the outcome changes across a range of appreciation assumptions
• An honest, side-by-side comparison against a HELOC, downsizing and a conventional mortgage

The key variables that move the answer — and how lenders treat them

A reverse mortgage has fewer moving parts than a conventional mortgage, but each one matters more, because there are no payments along the way to correct course.

• Age — the primary driver of the maximum available amount. Lenders offer a lower percentage of value at 55 and a higher percentage as age rises, since the loan is expected to be outstanding for a shorter period on average.
• The younger owner's age — if there is a spouse or co-owner on title, the maximum available amount is set by the younger of the two ages, because the loan cannot come due until the last surviving owner leaves the home.
• Interest rate — reverse mortgage rates sit meaningfully above conventional mortgage rates. Because there are no payments to offset that cost along the way, even a modest rate gap compounds into a large difference in balance over ten or twenty years.
• Home appreciation — the biggest genuine unknown in this whole calculation, and the one variable this page refuses to let you anchor on a single guess. The sensitivity grid exists because a responsible projection has to show a range, not one flattering number.
• How much you draw, and when — a smaller initial draw, or drawing over time through scheduled advances rather than all at once, slows the compounding and leaves more equity remaining at any given future point.

How a reverse mortgage balance is actually calculated in Canada

The maximum available amount is home value multiplied by an age-based percentage that rises from roughly 20% at age 55 toward a ceiling around 55% at older ages. Because no payments are made, the outstanding balance compounds: balance in year t = initial balance × (1 + rate)^t. Unlike a conventional mortgage, there is no offsetting principal repayment slowing that growth down.

The home value is projected forward on its own assumption: home value in year t = home value today × (1 + appreciation)^t. Remaining equity in any year is simply projected home value minus projected loan balance, floored at zero because of the no-negative-equity guarantee — the borrower or their estate can never be required to pay back more than the home is worth when it is sold, no matter how large the compounded balance has grown.

This is a materially different shape from a conventional amortizing mortgage, where the balance falls every month. Here it rises every month, which is exactly why the projection, not just the starting numbers, is the part of this calculation worth spending time on.

• Maximum available = home value × age-based LTV percentage
• Balance in year t = starting balance × (1 + interest rate)^t
• Home value in year t = home value today × (1 + appreciation)^t
• Remaining equity = MAX(0, projected home value − projected balance)

What you get, and how this decision actually gets qualified

A reverse mortgage is not qualified on income the way a conventional mortgage is — there is no debt service ratio to pass, because there are no monthly payments to make. Instead, the numbers that matter are age, home value, existing debt against the home, and the honest trajectory of the balance over time.

• Maximum available and net cash to you — set your ceiling today, after any existing mortgage is paid off from the proceeds.
• The balance projection — shows the real cost of borrowing this way over the years you expect to remain in the home, since interest compounds on interest with nothing paid down.
• Remaining equity at ages 85 and 90 — the concrete, personal figures a family can actually plan around, rather than an abstract percentage.
• The sensitivity grid — an honest acknowledgement that nobody knows the future appreciation rate, shown as a range rather than a single confident guess.
• The alternatives comparison — a reverse mortgage suits a narrow set of situations well: no other income, wanting to stay in the home, and no plan to leave a large amount of home equity behind. Outside that situation, a HELOC, downsizing or a conventional refinance is very often the better fit, and this page says so plainly.

Using your results well

Run the projection at your realistic time horizon, then look at the sensitivity grid before you look at anything else — it is the honest version of the number, not the single-scenario one. If you are an adult child helping a parent think this through, the remaining-equity figures at 85 and 90 are the ones worth sitting down with them over.

This calculator deliberately does not model scheduled or combination draws precisely — it shows the more conservative lump-sum case, since real scheduled advances compound less in total. It also does not replace independent legal advice, which is required before signing a reverse mortgage in Canada specifically so that someone other than the lender walks you through exactly what is shown here.

• Compare the alternatives table before assuming a reverse mortgage is the right fit
• Run the sensitivity grid at a lower appreciation assumption than you personally expect, not just your best guess
• Ask specifically about the no-negative-equity guarantee with any lender you are considering
• Bring the remaining-equity figures to a family conversation, not just the amount available today
• Get independent legal advice before signing — it is required, and it exists to protect you

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