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- Current Reverse Mortgage Rates
Below are current reverse mortgage loan rates. If you have any questions about the rates, please don’t hesitate to call 1-888-888-4834 or Request a NO Obligation quote.
| Updated: February 9, 2024 | HECM Fixed Rate | HECM Adjustable Rate (Annual) | Jumbo Fixed (Proprietary) | Jumbo Adjustable (Proprietary) |
|---|---|---|---|---|
| Current Rates | 7.56% - 7.93% | 6.76% - 7.51% | 9.375% - 9.99% | 11.385% - 11.635% |
| APR | 8.996% - 9.427%* | N/A | 9.869% - 10.542%** | N/A |
| Index | N/A | 4.76% | N/A | 4.76% |
| Margin | N/A | 2.00 - 2.75 | N/A | 6.625% - 6.875% |
| Monthly Service Fees | $0 | $0 | $0 | $30 |
| MIP | 0.50% | 0.50% | None | None |
| Lending Limit | $1,149,825 | $1,149,825 | Max Loan: $4,000,000 | Max Loan: $4,000,000 |
2024 HECM lending limits are $1,149,825. Call 888-888-4834 for details.
Rates and Fees are subject to change without notice. These rates are for comparison purposes only. This is not an offer or commitment to lend at any set terms.
As you can see above, there is a range shown forall rates. Thereason for that is we give you the option to choose the best rate that best suites your individual situation. The general rule of thumb is that the lower the rate, the higher the origination fee will be. It’s a lot like “buying the rate down” on the forward side. When we discuss your scenario over the phone, we will give you all the details that go along with each rate, which includes a breakdown of all fees involved. Use our reverse mortgage calculator to see an estimate of what’s available to you.
The Total Interest Rate charged to a reverse mortgage loan is equal to the Margin + Index + Monthly Mortgage Insurance of 0.50%
Expert Tip #1: If you are comparison shopping reverse mortgages between multiple lenders, it is best to make certain that you provide the same information to all lenders so that you get an apples to apples comparison. It also best to make sure that you compare quotes prepared within the same week (Tuesday-Friday would be ideal as rates are updated late Monday afternoon and in effect on Tuesday). We are happy to review all quotes that you’ve received and will make every effort to meet or beat your best offering.
Choosing Fixed Rate vs. Adjustable Rate Reverse Mortgage Loans
Many seniors we speak to are dead set on a fixed rate reverse mortgage loan. Well, although it sounds like the most financially “stable” and conservative decision, it is worth exploring all options since the adjustable rate has more flexibility in terms of how you receive loan proceeds. When making a decision, remember that changes in your interest rate do not affect your monthly benefit as you are not making monthly payments. Fixed rate reverse mortgage loans require that you take a full draw at closing. With a reverse mortgage loan, you accrue interest on only the money that’s been drawn. If you have a large payoff or wish to take all funds available to you at closing, then a fixed rate reverse mortgage loan may be your best option. On the flip side, if you do not need all the money that’s available to you, a fixed rate reverse mortgage loan may not be your best option. With an adjustable rate reverse mortgage loan, you can set up a line of credit, monthly payments, a lump sum or a combination of any of these. In a line of credit, interest is not accrued until you receive the money.
Fixed Rate Reverse Mortgage Loan Solutions:
The fixed rate Home Equity Conversion Mortgage (HECM) eliminates the risk of adjustable-rate mortgages. With the HECM Fixed Rate loan, the borrower has the comfort of knowing exactly what their interest rate will be for the life of the loan and the certainty that the rate will never increase. In addition, since the interest accrual is known, borrowers will have the comfort of knowing exactly how much they may pass on to their estate. Borrowers must take a full draw at closing.
Adjustable Rate Reverse Mortgage Loan Solutions:
Adjustable rate reverse mortgage loans have by far been the most popular reverse mortgage loan to date. There are two types of adjustable rate reverse mortgage loans. Annual and monthly adjustable. The annual has an interest rate that adjusts once a year and is based on the 1 Year CMT, while the monthly has a rate that adjusts every month and is based on the 1 Month CMT. The month adjustable HECM is our most popular product due to market conditions.
Expert Tip #2: When shopping for a reverse mortgage, it is best to compare all program options before making a decision. While most customers we speak with initially want a fixed rate, most find the flexibility of an adjustable best suits their needs.
Treasury Index History
The Constant Maturity Treasury (CMT) Index is derived from the average monthly yield of various Treasury Securities, which are adjusted to reflect a constant maturity equivalent to one year.
This index is calculated by the U.S. Treasury, which establishes the yields for Treasury securities at a constant maturity. These yields are determined based on the daily yield curve, which in turn is derived from the closing market bid yields of Treasury securities that are actively traded in the over-the-counter market.
In September 2020, GNMA declared that it would discontinue the use of the LIBOR index for HECM loans starting February 1, 2021. As a result, lenders swiftly transitioned to the CMT index. The intention was to eventually adopt the new SOFR index as a replacement for LIBOR, but due to the SOFR index not being ready in time, the interim solution was to revert to the CMT index to phase out LIBOR.
The SOFR, or Secured Overnight Financing Rate, represents the cost of borrowing cash overnight with Treasury Securities as collateral, designed to be immune to the manipulation issues that plagued the LIBOR. The discovery of LIBOR’s vulnerability to manipulation led to its abandonment as a benchmark for adjustable-rate loans and triggered a significant antitrust lawsuit. Presently, more than a dozen individuals are facing trials for severe financial offenses.
Both the CMT and SOFR indexes are regarded as reliable and secure benchmarks. The CMT has a long history of trustworthiness, while the SOFR is structured to be resistant to manipulation, offering a more stable and transparent basis for financial instruments.
Index Rate as of February 7, 2024. Resource found here: 1 Month Treasury Chart (Last 5 Years)
The Effect of Interest Rates on Your Available Loan Proceeds
Interest rates have a direct impact on the amount of proceeds available to you on a reverse mortgage loan. The impact is seen on the principal limit. The principal limit is defined as the amount of money a reverse mortgage borrower can receive before expenses and payoffs are removed. The principal limit is calculated by multiplying the borrowers maximum claim amount (lesser of home value or the lending limit, currently at $1,149,825) by the principal limit factor (PLF).
The chart below shows a sample of PLF’s for borrowers ranging from 62-95, assuming a 5.0% expected rate.
| Borrower Age | PLF (Percent of Home Value) | Home Value: $250,000 | Home Value: 350,000 | Home Value: 450,000 | Home Value: 550,000 | Home Value: 650,000 |
|---|---|---|---|---|---|---|
| 62 | 41% | $102,500 | $143,500 | $184,500 | $225,500 | $266,500 |
| 65 | 43% | $107,500 | $150,500 | $193,500 | $236,500 | $279,500 |
| 70 | 46.5% | $116,250 | $162,750 | $209,250 | $255,750 | $302,250 |
| 75 | 49.2% | $123,000 | $172,200 | $221,400 | $270,600 | $319,800 |
| 80 | 53.4% | $133,500 | $186,900 | $240,300 | $293,700 | $347,100 |
| 85 | 59.1% | $147,750 | $206,850 | $265,950 | $325,050 | $384,150 |
| 90 | 65.3% | $163,250 | $228,550 | $293,850 | $359,150 | $424,450 |
| 95 | 72.7% | $181,750 | $254,450 | $327,150 | $399,850 | $472,550 |
PLF tables source: https://www.hud.gov/sites/documents/august2017plftables.xls
Reverse Mortgage Loan Refinance (HECM to HECM):
Best Rates onHECM Reverse Mortgageare still extremely low, but as they increase less proceeds will be available. It may be a good time for you to explore the option of a refinance now.
Call one of our specialist to determine if it makes sense to refinance your reverse mortgage loan. (888) 888-4834.
Jumbo Reverse Mortgage Loans:
We have a robust product offering forJumbo reverse mortgage loans, also known as proprietary reverse mortgage.
Purchase Reverse Mortgage Loan Solutions:
Beginning January 1, 2009, FHA began insuring reverse mortgage loans for Seniors to purchase homes. Reverse mortgage loans have traditionally been available for refinance loans in the past, provided the Senior resided in the home. Reverse Mortgage Loan for Home Purchase.
* APR Assumptions HECM Fixed Rate:
Fixed Rate Payment Options: Lump Sum
Adjustable-Rate Payment Options: Lump Sum, Line of Credit, Term, Tenure, Combination.
APR Illustration: 7.560% + .50% Monthly MIP = 8.060% in total interest charges. Assumes $2650,000 loan amount and includes 0.50% Mortgage Insurance, and standard 3rd party closing costs.
**APR Assumptions Jumbo Fixed Rate:
Fixed Rate Payment Options: Lump Sum
Jumbo APR Illustration: Assumes $1,000,000 loan amount, and includes standard 3rd party closing costs.
Adjustable-Rate Payment Options: Lump Sum or Line of Credit
Index: 1 Year CMT
