Financial Calculators
Reverse Mortgage Calculator
House-rich and cash-poor is a solvable problem. This is what the solution pays.
Monthly payout
₹14,476
for 15 years, staying in your home
- Maximum loan (LTV)
- ₹60,00,000
- Total you receive
- ₹26,05,735
- Interest accrued by the end
- ₹33,94,265
- Loan against the home at the end
- ₹60,00,000
A reverse mortgage pays a senior owner a monthly amount against the home, repayable from its sale after death or on moving out; heirs can repay and keep it. Payouts are not taxable as income. The interest compounds silently, which is why the total received is far below the loan at the end.
These figures are for illustrative purposes only and are not investment advice. Please consult your investment adviser for investment related advice.
Income from the roof over your head
A reverse mortgage lets a senior citizen owner receive a monthly amount from a lender against the home, while continuing to live in it. The loan, with interest, is settled from the home's sale after the owner and spouse pass away or move out permanently; heirs can repay it and keep the house. Payouts are not treated as income for tax.
The catch is the interest: it compounds quietly for the whole period, so the loan at the end is much larger than the total received. The calculator shows both sides plainly.
Payouts that accumulate to the loan limit
Loan limit = home value x LTV\nMonthly payout = limit x i / ((1 + i)^n - 1), i = rate/12\nInterest = limit - total payoutsWorked example: on a home worth Rs 1,00,00,000 with a 60% loan-to-value at 10% over 15 years, the monthly payout is Rs 14,476. That is Rs 26,05,735 received in total, against a loan of Rs 60,00,000 at the end; the difference, Rs 33,94,265, is interest.
Frequently asked questions
Who is eligible?
Owners aged 60 and above (spouse usually 55 and above for a joint loan) of a self-occupied residential property with clear title. Tenure is typically capped at 15-20 years, and payouts stop after that though the owner stays.
Is the payout taxable?
No. Reverse mortgage payments are treated as loan instalments, not income, and the eventual transfer of the property to the lender is exempt from capital gains for the borrower.
What happens if the loan exceeds the home's value?
The lender bears the shortfall; the borrower or heirs are not asked to make it up. If the sale exceeds the loan, the surplus goes to the heirs.
Is this better than selling and renting?
It depends on how strongly you want to stay put. Selling releases the full value to invest, at the cost of moving. The reverse mortgage releases a fraction, with no move. The Rental Yield and SWP calculators help compare.
Every asset can fund retirement. Even the house.
We help seniors weigh a reverse mortgage against downsizing, an SWP and an annuity, with the family in the room.