If you’re 62 or older and a homeowner, your house could be your biggest financial asset. A reverse mortgage can unlock a portion of the equity in your home to give you cash without requiring you to sell your house or make monthly mortgage payments. But the most common question we hear from prospective clients is, “How much money can I get?”
The truthful response is that it will fluctuate based on how old you are, where you live, and prevailing interest rates. Our guide explains how this figure is determined, the caps for 2026, and what you will see before you apply.
The Short Answer
For many homeowners, the amount they can borrow through a reverse mortgage is roughly 40% to 60% of their home’s value, and sometimes more. This is known as the principal limit. The maximum home value the FHA will consider when calculating a federally insured Home Equity Conversion Mortgage (HECM) in 2026 is $1,249,125.
This limit applies to the home value used in the calculation, not the amount you can actually receive. Your available proceeds will generally be lower due to the factors explained below.
The Four Factors That Determine Your Amount
- Your age. Younger borrowers generally qualify for a lower percentage because the loan is expected to last longer. If there are two borrowers, the age of the younger borrower is typically used. For example, a 75-year-old will generally qualify for a higher percentage than a 65-year-old with the same home value.
- Your home appraisal. Your home’s value is determined by an FHA-approved appraiser. For a HECM, the value used to calculate your borrowing limit cannot exceed the applicable FHA lending limit.
- Current interest rates. Lower expected interest rates generally allow you to borrow more, while higher rates reduce the amount you can borrow. This is why borrowers of the same age with similarly valued homes may receive different offers at different times.
- Your current mortgage balance. Any existing mortgages or liens on your home generally must be paid off using the reverse mortgage proceeds. The remaining funds, after applicable fees and other required deductions, determine how much you may have available to access.
Understanding the 2026 HECM Lending Limit
The FHA periodically updates the maximum claim amount depending on home prices across the country. For case numbers assigned Jan. 1, 2026, and later, the maximum FHA loan amount increased to $1,249,125 from $1,209,750 in 2025. The cap applies throughout the country.
For higher-value homes, the maximum equity to be used in a HECM is $1,249,125. In other words, if the value of a home is below this amount, then the entire appraised value would be used. If the value of a home exceeds the maximum allowed, then the first $1,249,125 of the appraised value of the home will be used.
A Simple Example
Let’s take an example… This is a hypothetical example. Your actual numbers will vary.
For example, a 72-year-old homeowner has a home valued at $450,000 with an outstanding mortgage balance of $75,000. Assuming a principal limit factor of 50%, the principal limit would be approximately $225,000. After paying off the existing mortgage, roughly $150,000 would remain before closing costs and fees. Depending on the loan terms and applicable disbursement limits, these funds could be accessed through a lump sum, monthly payments, a line of credit, or a combination of these options.
How Can You Receive Your Money?
The available amount is only one side of the coin. There is also a matter of how you receive it, and this, in turn, determines how much it is worth in the years to come.
- Lump sum: Single payment at closing, often with a fixed interest rate. This is good for big one-time expenses (think paying down the mortgage).
- Monthly Payments: Provides income for a specified number of years, or for life, which can add to Social Security or pension income.
- Line of credit: Money you can access as you need it. An unused adjustable-rate HECM line of credit can increase and grow over time. This means you can access more money in the future.
- A hybrid: Several options combine a lump sum and a line of credit or monthly payments.
Keep in mind that there are restrictions on how much you can withdraw during the first year. Generally, FHA limits first-year withdrawals to 60% of the principal limit. However, borrowers may be able to access more if they need to pay off an existing mortgage and cover certain required costs.
Costs That Reduce Your Net Proceeds
What Does a Reverse Mortgage Cost?
Reverse mortgage loan balances generally grow over time as interest and fees accrue. Typical costs include an origination fee, third-party closing costs (including appraisal and title fees), and FHA mortgage insurance premiums. The upfront mortgage insurance premium is 2% of the maximum claim amount, followed by an annual premium of 0.5% of the outstanding loan balance.
These costs can often be included in the loan, which reduces the amount of cash available to you and the equity remaining in your home. Ask your loan officer to provide a complete, written breakdown of all costs so you can determine whether the loan aligns with your financial goals.
What You Still Want to Stay on Top Of?
A reverse mortgage is not without responsibilities. Homeowners must continue living in the home as their primary residence, paying property taxes and homeowners insurance, and maintaining the property. The lender will also conduct a financial assessment to determine whether you can meet these ongoing obligations. Before completing the loan process, you must attend reverse mortgage counseling, which is also a good opportunity to ask questions.
Typically, the loan becomes due when the last borrower dies, permanently moves out, or sells the home. As a non-recourse loan, a federally insured HECM generally does not require borrowers or their heirs to repay more than the home’s value when the loan is repaid.
Tips to Make the Most of Your Equity
- Decide what you want to achieve first. Paying off a mortgage, home improvements, and forming a safety net each point to a different payout choice.
- Estimate payments. Prequalify before you compare. See how it stacks up against a home equity loan, a HELOC, and downsizing.
- Consider the timing. Allowing some extra time to get the most out of your proceeds is often the right thing to do, but it assumes that you currently have and can wait to satisfy those needs.
- Get your family involved. Bring your heirs into the loop early, so they learn about how the loan operates and the ultimate ownership of the home.
Get Your Personalized Estimate
With so many factors influencing how much you can borrow, the best way to determine what you might qualify for is to review the numbers with a mortgage professional. Contact Reliance Financial, and we’ll help you explore your options, explain the costs in simple terms, and determine whether a reverse mortgage is right for you. Call us or contact our team today for a free estimate.
FAQs
1. How old do you have to be to get a reverse mortgage?
You must be 62 or older to take out the loan. When there are two borrowers, your age will be used to figure out your proceeds, and since the borrower is younger, a younger spouse generally results in less money.
2. Am I still the owner of my house with a reverse mortgage?
Yes. The title remains in your name, and you retain ownership. You are still responsible for property taxes, homeowners insurance, upkeep of the property, and residing in the home as your primary residence.
3. How to make a monthly mortgage payment.
There are no monthly payments. The interest and fees are rolled into the loan balance, which will only have to be repaid upon the sale or permanent departure of the last borrower.
4. What about my heirs and might they end up owing more than the property’s worth?
HECMs are non-recourse, so you and your heirs will never be responsible for anything more than the value of the home. Heirs can keep it by paying off the lesser of the balance or 95 percent of the appraised value.
5. Am I free to spend my reverse mortgage money on whatever I choose?
Generally, yes. You may use the funds to pay off your current mortgages, medical expenses, home repairs or living expenses to bridge the gap until retirement. The funds are loan funds and are therefore not taxable income.
6. How much does a reverse mortgage cost?
Expenses consist of: origination fee, closing costs, and FHA mortgage insurance; 2% at the time of the initial maximum claim amount, and 0.5% each year after that. Most are rolled into the loan, minimizing your net proceeds.
