A reverse mortgage is a special type of loan for older homeowners (aged 62 and above in the U.S.) that allows them to convert a portion of the equity in their home into cash. Unlike a traditional mortgage, the borrower doesn't make monthly payments to the lender. Instead, the loan balance grows over time, and the loan is repaid when the borrower sells the home, moves out, or passes away. This Reverse Mortgage Calculator provides a simplified estimate based on the rules of a Home Equity Conversion Mortgage (HECM), the most common type of reverse mortgage. This tool is intended as an estimator and not a guarantee of a loan. To get an estimate, you need to provide several details. First, enter the 'Age of the Youngest Borrower'. Second, input the 'Current Home Value'. Third, specify any 'Existing Mortgage Balance' that would need to be paid off with the reverse mortgage proceeds. You will also need to provide an 'Estimated Annual Interest Rate' for the loan and a 'Projection Timeframe' in years to see how the loan balance evolves. After clicking 'Estimate', the calculator will determine your potential 'Principal Limit' (the total amount you can borrow) based on your age and home value. It then calculates the 'Net Principal Available' to you as a lump sum after paying off any existing mortgage. The tool also generates a projection table showing how the 'Loan Balance' increases and your 'Remaining Equity' in the home decreases year-by-year over your chosen timeframe. This provides a valuable, long-term view of the financial implications.