For educational purposes only. Not financial advice. Always consult a licensed mortgage professional. Read disclaimer
Reverse Mortgage vs. Home Equity Investment Calculator
The first interactive side-by-side comparison of reverse mortgages and home equity investments (HEIs). Adjust your home's projected appreciation to see which option costs more over your time horizon.
Important — read before using this calculator
This calculator provides estimates only. Actual reverse mortgage loan amounts, interest rates, fees, and terms vary significantly by lender, your age, home value, and credit profile. HECM reverse mortgages require HUD counseling before closing.
Home Equity Investment terms vary by provider (Unison, Point, Hometap, Splitero, etc.). The appreciation share percentage and other terms depend on your specific agreement — enter the figures from any actual offer you've received for the most accurate comparison.
This is not financial advice. Consult a HUD-approved counselor and a licensed financial advisor before making decisions about accessing your home equity.
Not financial advice. For informational purposes only. HECM requires age 62+; proprietary reverse mortgages may allow age 55+ in some states.
Your situation
HECM requires 62+; some proprietary products allow 55+
Key variable — higher appreciation makes HEI costlier
Reverse mortgage
Est. principal limit factor: 57% of home value (approx.; varies by age and rates — not a lender quote). Max available proceeds: $106,500.
Illustrative rate — actual rates vary by lender.
Capped at estimated max available ($106,500)
Home equity investment (HEI)
Enter the lump sum from your HEI offer
Typical range 15–40%
Most HEI contracts are 10–30 years
Crossover insight
At 7.5% annual appreciation, both options have roughly the same effective cost over 10 years. At your 3.0% rate, the reverse mortgage costs more than the HEI.
Side-by-side comparison
After 10 years at 3.0% annual appreciation
| Reverse Mortgage | Home Equity Investment | |
|---|---|---|
| Cash received today | $100,000 | $100,000 |
| Estimated home value at end of term | $604,762 | $604,762 |
| Amount owed at end of term | $231,111 (loan + interest) | $151,191 (25% of home value) |
| Remaining equity to you/heirs | $373,651 | $453,572 |
| Effective total cost | $131,111 | $51,191 |
Lower cost option
HEI
Reverse mortgage vs HEI guide
How reverse mortgages and home equity investments actually differ
Both products let you tap home equity without a traditional monthly mortgage payment, but they are fundamentally different. A reverse mortgage is a loan. A home equity investment (HEI) is a contract to share future home value. Mixing them up can cost you — or your heirs — tens of thousands of dollars.
I built this calculator so you can compare real offers side by side using your home value, expected appreciation, and time horizon. Use the sections below to understand which structure fits before you request counseling or sign anything.
What a reverse mortgage is
A reverse mortgage is a loan secured by your home. Eligible homeowners — typically age 62 or older for FHA-insured Home Equity Conversion Mortgages (HECMs) — can access equity as a lump sum, a line of credit, or monthly payments. You do not make monthly principal and interest payments. Interest accrues on the balance over time. The loan is usually repaid when you sell, move out permanently, or pass away.
HECM reverse mortgages include non-recourse protection: you or your heirs never owe more than the home is worth when the loan is repaid. Borrowers must complete HUD-approved counseling before closing. Proprietary (non-FHA) reverse mortgages may have different age and loan limits, and they do not always carry the same insurance protections.
What a home equity investment is
An HEI is not a loan. Providers typically offer a lump sum today in exchange for a percentage of your home's future value — often tied to appreciation or total value at settlement. There is usually no monthly payment and no interest accruing. The cost is settled when you sell, refinance, or buy out the contract at the end of the term.
Because the provider's share grows with your home's value, strong appreciation over a long hold period can make an HEI more expensive than a reverse mortgage. Modest appreciation or a shorter time horizon can make an HEI comparatively cheaper. Always model both outcomes with numbers from actual offers, not marketing examples.
When a reverse mortgage may win
Longer time horizons with moderate appreciation expectations often favor reverse mortgages, especially if you want flexible ongoing access through a growing line of credit. HECMs also come with established regulatory protections and FHA insurance. If you prefer the predictability of accruing interest over an open-ended appreciation share, a reverse mortgage is usually the clearer fit.
When an HEI may win
Shorter time horizons, a desire to avoid interest accrual, or a need for a one-time lump sum without adding debt can favor an HEI. Some homeowners who do not meet HECM's age 62 requirement also explore HEIs when proprietary reverse mortgages are unavailable or unattractive. If you expect modest price growth, the provider's share may stay relatively low compared with a long-term reverse mortgage balance.
How to use this calculator responsibly
Enter figures from written quotes whenever possible: lump sum amounts, interest rates or HEI share percentages, fees, and contract terms. Run optimistic and pessimistic appreciation scenarios. Compare total cost at the year you expect to sell or settle. Then talk with a HUD-approved reverse mortgage counselor and a fee-only advisor before deciding — this tool estimates costs; it does not replace personalized advice.
If you are still deciding whether to borrow against equity at all, also review our HELOC vs home equity loan comparison and the home equity loan calculator.
Frequently Asked Questions
What is a home equity investment (HEI)?▾
How is a reverse mortgage different from an HEI?▾
Which is better: a reverse mortgage or a home equity investment?▾
What age do you need to be for a reverse mortgage?▾
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Read this guide →Rate defaults based on Freddie Mac PMMS. Property tax rates from ATTOM Data. FHA MIP rates from HUD.gov. VA funding fees from VA.gov. Last updated October 2026. Learn about our data sources.