The principal limit factor (PLF) is a HUD table value that determines what percentage of your home value you can borrow. HUD publishes PLF tables for each age from 62 to 90 at different expected interest rates. The higher your age, or the lower the current rate, the larger the PLF and the more you can access. Waiting from 62 to 70 adds roughly 10 percentage points of PLF, which on a $450,000 home translates to about $45,000 more in borrowing power. To compare what a conventional mortgage would cost at the same home value, see the mortgage calculator by state.
| Age | PLF at 7% Rate | PLF at 6.5% Rate | $450K Home at 6.5% |
|---|---|---|---|
| 62 | 41.3% | 44.3% | $199,350 |
| 65 | 45.4% | 48.4% | $217,800 |
| 70 | 52.0% | 55.0% | $247,500 |
| 75 | 58.2% | 61.2% | $275,400 |
| 80 | 64.1% | 67.1% | $301,950 |
| 85 | 69.3% | 72.3% | $325,350 |
| 90 | 73.9% | 76.9% | $346,050 |
Values are approximations based on HUD PLF methodology. Actual PLF at origination depends on the lender's expected rate at closing. Higher expected rates reduce PLF; lower rates increase it.
Three cost buckets reduce the principal limit to a net proceeds figure. The upfront MIP is always 2% of the max claim amount (home value or $1,149,825, whichever is lower). The origination fee equals 2% of the home value, subject to a $2,500 floor and $6,000 ceiling. Third-party closing costs (appraisal, title, attorney) typically run $3,000 to $5,000. If you have an existing mortgage that must be paid off at closing, that balance also reduces what you receive. If you're planning to pay down existing debt before applying, the debt snowball calculator can help project your payoff timeline.
Worked example: Carol, age 73, $500,000 home, 6.5% expected rate, no existing mortgage:
HECM borrowers can choose how they receive proceeds. The line of credit option has a compounding growth feature that other reverse mortgage products do not offer: the unused portion grows at the same rate as your loan balance, increasing your available credit over time. This makes the LOC strategically valuable for borrowers who do not need funds immediately. For retirement income planning, use the savings duration calculator to estimate how long other assets last alongside HECM proceeds.
| Payout Type | Best Suited For | Key Tradeoff |
|---|---|---|
| Lump Sum | One-time large expense: home renovation, medical bill, or paying off an existing mortgage at closing | Entire balance draws interest from day one; the loan grows fastest with this option |
| Monthly Tenure | Supplementing Social Security or a pension to cover recurring living expenses for as long as you live in the home | Payments stop if you move out permanently or pass away; does not outlast your residency |
| Line of Credit | Flexible access to equity as needed, without drawing a fixed amount upfront | Unused credit grows at the loan interest rate, increasing available funds over time |
Researches and verifies the formulas, methodology, and source data behind each calculator on CalculatorFlux. All tools are built and checked against the cited references before publication.
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