Reverse mortgage rates are set by each lender, but federal rules fix how a HECM rate is built: a market index plus the lender's margin. A fixed rate comes only with a single lump sum at closing, while lines of credit and monthly payments use an adjustable rate with federal caps. A lower expected rate means you can borrow more.
- Reverse mortgage (HECM) rates are set by each lender, but federal rules fix how they're built: a market index plus the lender's margin.
- A fixed rate comes only with a single lump sum at closing. Lines of credit and monthly payments use an adjustable rate with federal caps.
- A lower expected rate means a bigger loan amount, so compare margins and fees from at least three lenders before you choose.
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Get your free guideThere's no single "reverse mortgage rate" posted anywhere. Each lender sets its own rates, and they change daily with the bond market. What federal rules do fix is how a Home Equity Conversion Mortgage (HECM) rate is built, how much it can move, and how it affects the amount you can borrow. This guide explains those rules, with today's index values, so you can compare lender quotes. New to the topic? Start with how a reverse mortgage works.
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Try the estimate calculatorAre reverse mortgage rates fixed or adjustable?
| Option | How you get the money | How the rate works | Source |
|---|---|---|---|
| Fixed rate | One lump sum at closing only. You can't draw more later. | Agreed with the lender and never changes. | 24 CFR 206.19(e), 206.21(a) |
| Annual adjustable | Line of credit, monthly payments, or a mix. | Adjusts once a year. Each change is capped at 2 percentage points, and the total change over the life of the loan is capped at 5 points from your starting rate. | 24 CFR 206.21(b)(1) |
| Monthly adjustable | Line of credit, monthly payments, or a mix. | Adjusts every month. There's no yearly cap, and the lifetime cap is 10 percentage points from your starting rate. | 24 CFR 206.21(b)(2) |
Two rates on one loan: the note rate and the expected rate
An adjustable HECM has two rates, and lenders often quote both:
- The note (interest) rate is what your balance actually grows by. It equals a short-term index plus the lender's margin. The index must be the 1-year Constant Maturity Treasury (CMT) yield or the 30-day average Secured Overnight Financing Rate (SOFR) for annual loans, or the 1-month CMT or an approved SOFR index for monthly loans (24 CFR 206.21).
- The expected rate is used only to work out how much you can borrow. For an adjustable HECM it's the 10-year CMT yield (or an approved SOFR index) plus the same lender margin. For a fixed HECM it's simply the fixed rate (24 CFR 206.3).
The margin is the part you can negotiate. The index is the same for every lender on a given day, so when you compare quotes, compare margins.
Recent index values (not lender rates), as of the dates shown
These are the public market indexes HECM rates are built on. Add a lender's margin to get a rate. These aren't offers or lender quotes.
| Index | Value | Date | Source |
|---|---|---|---|
| 1-year CMT (annual adjustable note rate) | 4.50% | Oct 27, 2026 | U.S. Treasury |
| 1-month CMT (monthly adjustable note rate) | 4.10% | Oct 27, 2026 | U.S. Treasury |
| 30-day average SOFR (annual adjustable note rate) | 3.90% | Oct 28, 2026 | New York Fed |
| 10-year CMT (expected rate) | 4.99% | Oct 27, 2026 | U.S. Treasury |
Daily values shown. HUD rules refer to weekly average yields, so a lender's figure may differ slightly. The 30-day SOFR average is rounded from 3.89522%.
Example only: if a lender's margin were 2.00%, the expected rate on Oct 27, 2026 would be about 4.99% + 2.00% = 6.99%, and an annual adjustable note rate on the 1-year CMT would start near 4.50% + 2.00% = 6.50%. Real margins vary by lender and loan, so get written quotes.
How does the rate change how much you can borrow?
HUD turns your age and the expected rate into a "principal limit factor," a percentage of your home's value (counted up to $1,249,125, valid through Dec 31, 2026, per HUD) that you can borrow before costs. A higher expected rate means a lower factor. HUD's principal limit factor table starts at a 3% expected rate, and FHA's calculator accepts expected rates from 3.0%, so a lower rate doesn't raise the factor above the 3% row (FHA Connection HECM calculator help). Factors from HUD's table for loans with case numbers assigned on or after October 2, 2017:
| Youngest borrower's age | Expected rate 5% | 6% | 7% |
|---|---|---|---|
| 62 | 41.0% | 35.7% | 31.2% |
| 72 | 46.7% | 41.6% | 37.2% |
| 82 | 55.6% | 51.1% | 47.1% |
Source: HUD, HECM principal limit factors effective October 2, 2017 (Mortgagee Letter 2017-12 and HUD's published factor table). Checked October 28, 2026; confirm current factors with a lender.
So for a 72-year-old with a $400,000 home, moving from a 6% to a 7% expected rate drops the starting principal limit from about $166,400 to about $148,800, before costs and any mortgage payoff. That's why a half-point difference in margin matters. See how much can I get? for the full math.
The other cost that grows with your rate: mortgage insurance
On top of interest, every HECM carries FHA mortgage insurance: 2% of the maximum claim amount upfront and 0.5% a year on the loan balance (HUD Mortgagee Letter 2017-12). Interest and the annual premium are both added to your balance. If your note rate is 6.50%, your balance grows by roughly 7% a year before servicing fees. Read reverse mortgage costs explained for the full fee list.
How do you compare reverse mortgage rate quotes?
- Get at least three quotes on the same day, for the same loan type (fixed or which adjustable).
- Ask for the margin, the index, and the expected rate in writing, not just a "rate."
- Ask what the lender charges for origination (HUD caps it at $6,000) and whether a lower margin comes with higher fees.
- Compare the net principal limit, which is what's left for you after costs and payoffs.
- Ask about a rate lock. Federal rules let you lock the expected rate and margin before closing with the lender's agreement (24 CFR 206.3).
Every HECM requires counseling with a HUD-approved counselor first. They can walk you through rate options at no or low cost. Find one at hud.gov/counseling or call (800) 569-4287, and read what to expect in counseling.
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Frequently asked questions
Are reverse mortgage rates fixed or adjustable?
Both exist. A fixed-rate HECM pays one lump sum at closing only. Lines of credit and monthly payments use an adjustable rate, which changes yearly with caps of 2 points a year and 5 points over the loan, or monthly with a 10-point lifetime cap.
What is the expected rate on a reverse mortgage?
It's the rate HUD uses to work out how much you can borrow. For an adjustable HECM it's the 10-year Treasury (CMT) yield or an approved SOFR index plus the lender's margin. For a fixed HECM it equals the fixed rate.
Does a higher interest rate mean I can borrow less?
Yes. HUD's principal limit factors fall as the expected rate rises. For a 72-year-old, the factor is 41.6% at a 6% expected rate and 37.2% at 7%.
Can I negotiate a reverse mortgage rate?
You can compare and negotiate the lender's margin and fees. The index is the same for every lender on a given day, so get written quotes from at least three lenders on the same day.
Is there a minimum rate for a reverse mortgage?
HUD's principal limit factor table starts at a 3% expected rate, and FHA's calculator accepts expected rates from 3.0%, so a lower rate doesn't raise the factor above the 3% row.
Who wrote this guide
This guide is written and maintained by the Clear Reverse editorial team from the primary sources listed below. The "Last updated" date at the top shows when it last changed. Clear Reverse is an education service, not a lender or mortgage broker, and nothing here is legal, tax or financial advice. Spotted an error? Email hello@clearreverse.com. How we research and update our guides.
Sources
- 24 CFR Part 206 (HECM rules), sections 206.3, 206.19 and 206.21 (rules checked Oct 28, 2026)
- HUD Mortgagee Letter 2017-12 (2% initial and 0.50% annual mortgage insurance) (dated Aug 29, 2017; accessed Oct 30, 2026)
- FHA Connection HECM calculator help (checked Oct 28, 2026)
- HUD: HECM program page (maximum claim amount table) (lists the 2026 limit of $1,249,125, valid through Dec 31, 2026; accessed Oct 30, 2026)
- U.S. Treasury daily yield curve rates (values dated Oct 27, 2026 in the table)
- New York Fed SOFR averages (value dated Oct 28, 2026 in the table)
- CFPB: Reverse mortgages (consumer tools) (accessed Oct 30, 2026)
- 24 CFR 206.19 (payment plans), eCFR (current text accessed Oct 31, 2026)
- 24 CFR 206.3 (definitions, including maximum claim amount), eCFR (current text accessed Oct 30, 2026)
- HUD: Find a HUD-approved housing counselor (accessed Oct 30, 2026)
Rules checked October 28, 2026; index values as dated in the table. Rates change daily and vary by lender. Nothing here is a rate quote or loan offer; confirm details with a HUD-approved counselor and a licensed lender.