Why this page has no rate on it
Because a reverse mortgage rate quoted without your age, your home's value and your margin is a number with no meaning, and publishing one would be advertising a term we cannot honour. Any site showing today's reverse mortgage rate in a big font is showing you a lead magnet. What follows is how to read a real quote when you get one.
The two rates
| Feature | Expected rate | Note rate |
|---|---|---|
| What it does | Decides how much you can borrow | Decides how fast the balance grows |
| Set when | Fixed at FHA case number assignment | Adjusts monthly or annually (or fixed, on a lump sum) |
| Made of | A long-term index plus the lender's margin | A short-term index plus the same margin |
| Changes after closing | Never | Yes, on an adjustable loan |
| Usually advertised | Rarely | Almost always |
The expected rate is the one to ask about, and it is the one you will have to ask for. It never appears in an advertisement because it is not a selling number — it is a constraint.
What the expected rate does to your proceeds
HUD publishes a table crossing every borrower age against every expected rate. The cell where they meet is your principal limit factor — the share of your home's value the loan can ever advance. Higher expected rate, lower factor, less money.
The effect is not marginal. On the same house, for the same 72-year-old, moving the expected rate from 7.5% to 5% can change the proceeds by tens of thousands of dollars. The calculator has a slider for exactly this — leave age and value alone, drag the rate, and watch.
Two consequences follow:
- Timing matters more than most borrowers realise. If there is no urgency, a falling rate environment is worth waiting for. If rates are climbing, waiting costs you.
- Your case number assignment date is the date that counts, not your application date and not your closing date. Ask when it will be assigned.
The margin is the negotiable part
The index is the market's and nobody controls it. The margin is the lender's, it sits on top of the index in both rates, and it varies between lenders on identical files.
A higher margin means a higher expected rate, which means less money available to you, and a higher note rate, which means the balance grows faster. It is the single number most worth comparing, and it is the one least often volunteered.
The trade to understand
A lender can offer to cover your origination fee in exchange for a higher margin. Sometimes that is a good deal — on a short expected tenure, cash today beats a slightly faster-growing balance. Often it is not, because the margin compounds for as long as you live in the house and the origination fee is capped at $6,000 regardless.
Get it quoted both ways and compare them over the number of years you actually expect to be there. Any originator who will not model both is telling you which one is better for them.
Fixed or adjustable
A fixed-rate HECM exists but forces a single lump sum at closing — no line of credit, no monthly payments, no changing later. Interest starts accruing on the entire amount immediately, including money you will not spend for a decade.
An adjustable-rate HECM charges interest only on what you have actually drawn, and the unused portion of a line of credit grows at the loan's rate. Unless a mortgage payoff consumes nearly all your proceeds anyway, adjustable wins on arithmetic. The comparison in full is here.
Rate caps
Adjustable HECMs carry lifetime caps — typically 5 percentage points over the starting note rate on an annually adjusting loan, and 10 on a monthly. Ask for yours in writing and ask what the balance looks like at the cap, not just at today's rate. A projection that only models current rates is not a projection.
The five questions to ask any reverse mortgage lender
- What is the margin?
- What is the expected rate today, and when will my case number be assigned?
- What is the lifetime cap on the note rate?
- What does the balance look like in ten and twenty years, at today's rate and at the cap?
- Quote me with and without a lender credit against the origination fee.
Ask all five of at least two lenders. The answers will differ on identical files, and that difference is real money over a twenty-year loan.
What this estimate is, and what it is not
These figures are an illustration for planning only — not a loan offer, not a commitment to lend, and not a guarantee of what you will receive. Your real numbers depend on a completed appraisal, the expected interest rate on the day your FHA case number is assigned, your existing mortgage payoff, and a HUD financial assessment. A reverse mortgage is a loan that must be repaid, not a government benefit. You remain responsible for property taxes, homeowners insurance and upkeep, and the loan can become due if you stop meeting those obligations.