Reverse Mortgage vs HELOC Calculator
Both tap home equity — but a HELOC requires monthly payments, while a reverse mortgage doesn't. For homeowners 62+, the right choice depends on income, age, and how long you plan to stay.
About this tool
A HELOC requires monthly interest payments (and P&I at repayment). A reverse mortgage requires no monthly payments at all. This calculator shows your HECM proceeds and compares it to what a HELOC would cost each month — helping you choose the right equity access strategy.
How to use it
Quick steps to get the most out of this utility.
- 1
Enter home details
Value, existing mortgage, and borrower age.
- 2
Compare proceeds
HECM net available vs HELOC credit limit at same CLTV.
- 3
Compare monthly cost
HELOC requires payment; HECM does not.
- 4
Make your decision
Context on when each option wins for your situation.
Key Differences Between HECM and HELOC
Monthly payments: HELOC requires interest-only during draw, then P&I. HECM: zero monthly payments required. Qualification: HELOC requires income and credit score qualifying. HECM: qualified based on age and home equity (financial assessment still applies). LOC stability: HELOC can be frozen. HECM LOC is contractually guaranteed as long as you live in the home. Rate: Both are variable, but the HECM includes a 0.5% annual MIP on the balance, making the effective cost higher.
Frequently asked questions
Who should choose a HELOC over a reverse mortgage?+
Borrowers who: (1) plan to sell the home in the near term (within 5-10 years), since the HECM has substantial upfront fees; (2) have strong regular income and can easily afford HELOC payments; (3) are younger than 70 and want to preserve maximum equity for their heirs; or (4) want flexibility to repay and reborrow (the revolving feature of a HELOC).
Who should choose a reverse mortgage over a HELOC?+
Borrowers who: (1) are on a fixed retirement income and cannot comfortably make monthly payments; (2) want to eliminate mortgage payments from their budget; (3) want the LOC growth feature (no HELOC equivalent); (4) have insufficient income to qualify for a HELOC; or (5) are older (75+) where the PLF is favorable and the upfront costs are justified by the expected tenure.
Keep exploring
More utilities and reading from Toolisk.
More views of the same calculator
Open main calculator →Same underlying engine, written for different use cases. Pick the angle that matches your situation.