Why use DrawTally?
A reverse mortgage calculator built to inform, not to convert — no lead form, no contact request, no follow-up call.
Reverse mortgage sites are primarily sales tools
Most HECM calculators are operated by lenders or mortgage brokers who earn a commission when a loan closes. The calculator exists to collect your contact information and hand it to a loan officer. Older homeowners — the primary audience for reverse mortgages — are frequently targeted with aggressive follow-up. DrawTally has no such relationship.
The 60% first-year draw rule shown, not buried
Federal regulation limits most borrowers to drawing no more than 60% of their principal limit in the first 12 months of a HECM. Many calculators display the full amount available without making this restriction clear, which can lead to unexpected surprises at or after closing. DrawTally surfaces this limit in the output.
Balance growth projected honestly
Unlike a conventional mortgage, a reverse mortgage balance grows over time as interest and fees compound. DrawTally projects the balance year by year so you can see what the loan looks like at any point — information that tends to be minimized in marketing materials because the numbers aren't flattering late in the loan's life.
No personal information required
The HECM principal limit calculation uses age and home value. That is all this calculator asks for. No name, phone number, email address, or Social Security number — the identifiers other tools use to qualify and retain you as a sales lead.
What a HECM reverse mortgage actually is
A Home Equity Conversion Mortgage (HECM) is the only federally insured reverse mortgage product in the US. Unlike a traditional mortgage where you make payments to a lender, a HECM lets you draw equity from your home — as a lump sum, monthly income, or a growing line of credit — while deferring repayment until you sell, move out, or pass away. No monthly mortgage payments are required as long as you live in the home and keep up with taxes, insurance, and basic maintenance.
How the principal limit is determined
Your principal limit — the maximum you can borrow — is set by HUD using three inputs: your home's appraised value (capped at the FHA lending limit, currently $1,149,825), your age (the younger the borrower, the smaller the factor), and the Expected Interest Rate. HUD publishes a Principal Limit Factor (PLF) table that maps every age-rate combination to a percentage of the Maximum Claim Amount. Older borrowers at lower expected rates receive the largest principal limits — in some cases over 70% of the home's appraised value.
The 60% first-year draw rule
A common surprise for HECM borrowers: you cannot take all your proceeds at closing. HUD limits first-year draws to 60% of your gross principal limit — or your total mandatory obligations (existing mortgage payoff + upfront costs) plus an additional 10%, whichever is higher. Any remaining funds become available after the 12th month. This rule is designed to preserve equity and reduce the chance of borrowers outliving their proceeds, but it catches many people off guard when they expected to pocket the full net amount at close.
Why the balance grows over time
Unlike a forward mortgage where your balance shrinks every month, a HECM balance grows — because no payments are made. Each month, interest accrues on the outstanding balance, and an ongoing Mortgage Insurance Premium (0.5% annually of the balance) is added on top. This is why the year-by-year projection matters: a loan that starts at $150,000 might reach $300,000 in 12 years at 6.5%. The question is whether your home appreciates fast enough to preserve equity for your heirs — or whether you simply plan to stay in the home for the rest of your life, in which case the balance size is less relevant.
Reverse mortgage in plain terms: drawing equity without selling
A standard mortgage means you make payments every month and your loan balance shrinks. A reverse mortgage works the other way — the lender pays you, and the balance grows over time. You don’t make monthly payments. The loan is repaid when you sell the home, move out, or pass away. It’s only available to homeowners 62 and older. The appeal: you can access equity you’ve built in your home as income or a lump sum without selling. The catch: the loan balance compounds over time, which can significantly reduce what’s left for your heirs.
How much you can actually borrow
The amount you can borrow isn’t simply a percentage of your home’s value. HUD uses a formula that factors in your age, your home’s appraised value (up to a federal cap), and current interest rates. Older borrowers get a larger percentage — someone who is 80 can borrow more relative to their home value than someone who is 65, because there’s less time for interest to compound. Lower interest rates also increase how much you can access. DrawTally runs the formula and shows your principal limit before and after upfront costs.
Why you can’t take all the money at closing
Most people expect to receive their full principal limit immediately, but HUD limits first-year draws to 60% of your principal limit in most cases. Any remaining funds become available after 12 months. The exception: if you have an existing mortgage that needs to be paid off plus other required closing costs that total more than 60%, you can take those plus a small additional amount. This rule surprises many borrowers who planned to use the full proceeds right away. DrawTally shows you exactly how much is available at closing versus after month 12.
How the loan balance grows — and why it matters for your heirs
Because you’re not making payments, a reverse mortgage balance grows every month. Interest compounds on the outstanding amount, and an ongoing insurance premium is added on top. A loan that starts at $150,000 might reach $300,000 in 12 years. This doesn’t affect your right to live in the home — you can stay as long as you want, as long as you pay taxes and insurance. But it does affect what’s left when the home eventually sells. DrawTally’s year-by-year projection shows your loan balance alongside a projected home value so you can see how those two numbers relate over time.