Question 1

What is a reverse mortgage?

Accepted Answer

A loan for senior citizens that converts home equity into income: the bank pays you a fixed monthly amount against your house, and the loan - payments plus accumulated interest - is settled at the end of the tenure, typically by selling the property. You continue living in the house throughout.

Question 2

How does this calculator work?

Accepted Answer

From your property value and the loan-to-value (LTV) ratio it derives the sanctioned loan amount, then computes the fixed monthly payment structured so the balance - payments plus compounding interest - reaches exactly that amount at the end of the tenure.

Question 3

How much monthly income can a property generate?

Accepted Answer

As a reference: a ₹1 crore property at 60% LTV over 20 years at 8% interest pays about ₹10,119 per month. A shorter tenure or higher LTV raises the monthly amount; a longer tenure spreads the same loan across more payments.

Question 4

What is the loan-to-value (LTV) ratio?

Accepted Answer

The share of your property's value the bank will lend against - 30% to 90% in this calculator. At 60% LTV on a ₹1 crore home, the sanctioned loan is ₹60 lakh; the untapped 40% is a cushion for the bank against price declines and interest accumulation.

Question 5

Why does the loan balance grow instead of shrink?

Accepted Answer

It is a regular loan in reverse: you receive payments instead of making them, so interest is charged on everything disbursed so far plus previously accrued interest. The schedule shows the balance compounding month by month toward the sanctioned amount.

Question 6

What happens at the end of the tenure?

Accepted Answer

The accumulated balance is settled, usually by selling the property - though heirs can instead repay the loan and keep the house. Any sale value above the outstanding loan belongs to you or your heirs.

Question 7

How is this different from a home loan?

Accepted Answer

Direction and timing are inverted: the bank pays you monthly rather than the reverse, the balance grows rather than shrinks, payments arrive at the start of each month (retirees need income upfront), and recovery happens from the property at the end rather than from your income along the way.

Question 8

What does the schedule table show?

Accepted Answer

For each month or year: the opening balance, the payment you received, the interest accrued on the running balance, and the closing balance - so you can watch the loan build toward the sanctioned amount over the tenure.

Period	Opening balance	Payment	Interest	Closing balance
1	₹0	₹1,21,427	₹5,393	₹1,26,820
2	₹1,26,820	₹1,21,427	₹15,919	₹2,64,166
3	₹2,64,166	₹1,21,427	₹27,318	₹4,12,912
4	₹4,12,912	₹1,21,427	₹39,664	₹5,74,003
5	₹5,74,003	₹1,21,427	₹53,035	₹7,48,465
6	₹7,48,465	₹1,21,427	₹67,515	₹9,37,407
7	₹9,37,407	₹1,21,427	₹83,197	₹11,42,031
8	₹11,42,031	₹1,21,427	₹1,00,181	₹13,63,639
9	₹13,63,639	₹1,21,427	₹1,18,574	₹16,03,641
10	₹16,03,641	₹1,21,427	₹1,38,494	₹18,63,562
11	₹18,63,562	₹1,21,427	₹1,60,067	₹21,45,057
12	₹21,45,057	₹1,21,427	₹1,83,431	₹24,49,916
13	₹24,49,916	₹1,21,427	₹2,08,734	₹27,80,077
14	₹27,80,077	₹1,21,427	₹2,36,138	₹31,37,642
15	₹31,37,642	₹1,21,427	₹2,65,815	₹35,24,885
16	₹35,24,885	₹1,21,427	₹2,97,956	₹39,44,269
17	₹39,44,269	₹1,21,427	₹3,32,765	₹43,98,461
18	₹43,98,461	₹1,21,427	₹3,70,463	₹48,90,351
19	₹48,90,351	₹1,21,427	₹4,11,289	₹54,23,068
20	₹54,23,068	₹1,21,427	₹4,55,505	₹60,00,000

Home loan	Reverse mortgage
Lumpsum lending by bank to builder.	Annuity lending by bank to Senior Citizens (Retirees).
Loan sanctioned is in present value terms.	Loan sanctioned is in future value terms.
EMIs paid to bank deduct Interest first & balance amount is principal repayment.	EMIs receive from bank are principal only. Interest is calculated on the EMI amount received for each period.
EMIs are paid by borrower at the end of month.	EMI amount is required by the Senior Citizens (retired) at the beginning of the month.
Bank recover the loan amount from the borrower (through EMI payments).	Bank recovers the loan amount by selling off the mortgaged property at the end of Loan Tenure.
Outstanding Loan Balance can be computed using amortization table/function.	Outstanding Loan Balance can be computed by computing the Future Value.

Reverse Mortgage Calculator

Loan balance over time

Payment schedule

Home loan vs reverse mortgage

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