A reverse mortgage is a loan nobody repays until the house is sold, so the balance compounds for as long as it runs. This projects it.
It does not say how much you can borrow. That is set by each lender’s credit policy against your age, and there is no published rule to substitute.
Projects how a reverse mortgage balance grows when nothing is repaid, and what equity is left against an assumed property value.
Initial advance
The lump sum drawn at the start — the figure you have been offered, not one estimated here.
Regular drawdown
Any additional amount drawn each month. Drawing income rather than a lump sum grows the balance more slowly at first and faster later.
Assumed property growth
What decides whether equity survives the loan. Try it at several values, including zero, before relying on any single projection.
The balance at the end is the figure that surprises people. Interest compounds on interest with nothing being repaid, so the balance grows faster each year rather than steadily.
The equity line is the point of the exercise. Whether it stays positive depends on the race between the interest rate and the growth rate, and the loan wins that race whenever the rate exceeds the growth.
The balance as a share of what was drawn shows the multiple plainly. Over fifteen or twenty years at a typical rate it can exceed three times the amount borrowed.
Every figure below is computed by the same calculator on this page, from the inputs described. Nothing here is typed in by hand, so an example cannot disagree with the tool.
Compare the final balance against the amount drawn. The multiple is the whole story of these products, and it is why they are usually a late-stage decision rather than an early one.
When growth falls well below the interest rate the equity erodes rather than holds. This is the scenario worth planning for, not the optimistic one.
Drawing income rather than a lump sum keeps the balance lower for longer, because each dollar has less time to compound. The total drawn is similar; the interest is not.
Interest is applied monthly to the balance and added to it, because that is how these facilities charge. Annual compounding would understate the balance by a margin that grows with the horizon.
Drawdowns are added each month and fees once a year, matching how each is actually charged. The property is grown at the assumed rate and the equity is the difference.
Nothing is repaid
The projection assumes no voluntary repayments. Making them, where the contract allows, changes the outcome substantially.
One rate throughout
Reverse mortgage rates are usually variable and higher than ordinary home loan rates. A projection at today’s rate over twenty years is a scenario, not a forecast.
Statutory protection is not modelled
Australian law provides a negative equity protection on these contracts, so a borrower cannot generally end up owing more than the property is worth. The projection shows the arithmetic without it, which is why a negative equity figure here should be read as the loan reaching the value rather than exceeding it.
Eligibility is not assessed
How much can be released depends on age and on each lender’s policy. Nothing here estimates it, and any figure that claims to is guessing at a private credit rule.
Effects on payments are not modelled
A lump sum can affect means-tested entitlements depending on what is done with it. That is a question for a financial information service, not a calculator.
It affects what you leave behind
The balance is repaid from the estate. Anyone expecting to inherit the property should see this projection before the contract is signed, not after.
Works out gross equity in a property, and how much could be released while staying within a loan-to-value ratio you choose.
Works out the loan-to-value ratio: how much is borrowed as a percentage of what the property is worth.
Shows how a balance grows over time with regular deposits and compounding interest.
This calculator can be embedded on a business website, branded to match it, with a call to action that sends the enquiry to that business rather than collecting anything here.