Reverse mortgage rates: the two rates of a HECM
Why an adjustable HECM has two rates, where each one comes from this week, and what a point more or less does to the money you can use.
Principal limit factor, age 69 at 6.625 %
0.381
$410,000 × 0.381 = $156,210 of principal limit, before any cost.
| Expected rate entered | 6.65 % |
| Rate row of the table | 6.625 % |
| Age row of the table | 69 |
| Maximum claim amount | $410,000 |
| Principal limit | $156,210 |
| Age | 6.125 % | 6.375 % | 6.625 % | 6.875 % | 7.125 % |
|---|---|---|---|---|---|
| 62 | 0.351 | 0.339 | 0.328 | 0.317 | 0.307 |
| 65 | 0.372 | 0.361 | 0.349 | 0.338 | 0.328 |
| 70 | 0.409 | 0.397 | 0.386 | 0.375 | 0.365 |
| 75 | 0.438 | 0.426 | 0.415 | 0.405 | 0.394 |
| 80 | 0.482 | 0.472 | 0.461 | 0.451 | 0.441 |
| 85 | 0.544 | 0.535 | 0.525 | 0.516 | 0.507 |
| 90 | 0.614 | 0.606 | 0.598 | 0.590 | 0.582 |
Worked out by Radif Partners · How we calculate · factors read on hud.gov · not a loan offer
An adjustable HECM uses two rates built on the same lender margin: the expected rate, the 10-year Treasury rate plus the margin, decides how much you can borrow, and the note rate, the 1-year Treasury rate plus the margin, decides how fast the balance grows. In the week ending October 16, 2026 the 10-year Treasury averaged 5.15 % and the 1-year 4.49 %; with an example margin of 1.5 %, that gives an expected rate of 6.65 % and a starting note rate of 5.99 %. HUD reads the expected rate rounded to the nearest eighth, here 6.625 %. For a 69-year-old with a $410,000 home, the factor is 0.381 and the principal limit $156,210. One point higher, the limit falls to $139,400; one point lower, it rises to $175,480. On a fixed-rate HECM, the single rate does both jobs.
This week's indexes
| Rate | Index value | With the example margin | Role |
|---|---|---|---|
| 10-year Treasury (CMT), weekly average | 5.15 % | 6.65 % | Expected rate: sizes the loan |
| 1-year Treasury (CMT), weekly average | 4.49 % | 5.99 % | Note rate: interest on the balance |
The Treasury publishes these yields each business day (Treasury par yield curve), and the Federal Reserve releases the weekly averages that HUD refers to in its H.15 statistics (Federal Reserve H.15). The daily 10-year figure on October 19, 2026 was 5.15 %. CMT stands for constant maturity Treasury: the yield of a Treasury security adjusted to an exact term of one or ten years.
The margin is the lender's part, and HUD does not set it. It is fixed when you choose the loan and stays the same for its life: the same number is added to the 10-year index to get the expected rate and to the 1-year index (or to an approved SOFR index) to set and later adjust the note rate. Everything on this site uses an example margin of 1.5 %; replace it with the one in your offer, and the calculator above recomputes the factor.
The expected rate: how much you can borrow
HUD's factor table has one column per eighth of a point of expected rate, from 3 % to 18.875 %. The lender rounds your expected rate to the nearest eighth and reads the factor at the youngest borrower's age; 6.65 % is read as 6.625 %. A higher expected rate means HUD assumes the balance will grow faster, so it lends a smaller share. The expected rate is never charged to you. Below 3 %, the 3 % column applies.
| Expected rate | Column read | Factor at 69 | Principal limit, $410,000 home | Change from today |
|---|---|---|---|---|
| 5.65 % | 5.625 % | 0.428 | $175,480 | $19,270 |
| 6.15 % | 6.125 % | 0.404 | $165,640 | $9,430 |
| 6.65 % | 6.625 % | 0.381 | $156,210 | today |
| 7.15 % | 7.125 % | 0.360 | $147,600 | -$8,610 |
| 7.65 % | 7.625 % | 0.340 | $139,400 | -$16,810 |
| 8.15 % | 8.125 % | 0.321 | $131,610 | -$24,600 |
| 8.65 % | 8.625 % | 0.303 | $124,230 | -$31,980 |
For this borrower, each half point costs between $7,380 and $9,840 of principal limit. The full table for every age is on the principal limit factor page.
Change the margin of your offer
Principal limit factor, age 69 at 7.125 %
0.360
| Expected rate entered | 7.15 % |
| Rate row of the table | 7.125 % |
| Age row of the table | 69 |
| Maximum claim amount | $410,000 |
Locking the expected rate
Because Treasury rates move every day, the amount you were quoted can change before closing. With your agreement, the lender can lock the expected rate and the margin together at any time between application and closing, for up to 120 days counted from the assignment of the FHA case number, and extend an expired lock by another 120 days. If the lock includes a float-down option, the amount is recomputed at closing when the rate has fallen. HUD does not let the lender charge for either. Without a lock, both are set on the day of closing.
The note rate: how fast the balance grows
The note rate is what you pay, though not in cash: interest is added to the balance each month, together with 0.5 % a year of mortgage insurance. At a starting note rate of 5.99 %, the balance and any unused credit both grow by 6.49 % a year. Over ten years, $100,000 of unused credit line becomes $191,028; one point higher, $210,997. The same arithmetic applies to what you owe, which is why the note rate matters most to someone who draws early.
An adjustable note rate changes with its index. The annual version adjusts once a year, the first time between 12 and 18 months after closing, by at most 2 points at a time and 5 points over the life of the loan. The monthly version may adjust every month, with a lifetime cap 10 points above the starting rate, and a lender may offer it only alongside the annual one. The lender must send the new rate and the index behind it at least 25 days before each adjustment.
Unused credit at another note rate
Credit line after 10 years, unused
$150,725
| After 1 year | $80,422 |
| After 5 years | $106,322 |
| After 15 years | $213,671 |
| After 20 years | $302,905 |
Where the rates appear on your papers
You do not have to take a quoted rate on faith. The HUD payment plan signed at closing, the form this site's calculator follows, carries five rate items at the top: the expected average mortgage interest rate, whether it was locked, the date used to pick the index value for that rate and the principal limit, the initial note rate, and the lender's margin. Subtract the margin from the expected rate and you should find the 10-year Treasury average of the date shown; subtract it from the note rate and you should find the 1-year index of that time.
Two checks follow from the rules. The margin must be the same number in both places, since HUD defines it once for the expected rate, the initial note rate and every later adjustment. And the index named for the starting note rate must be the one used for its adjustments: HUD does not allow a loan to start on one index and adjust on another, except where it has approved a switch, such as the move away from LIBOR.
Fixed-rate HECMs
On a fixed-rate HECM the lender and the borrower agree on one rate, which serves both as the note rate and as the expected rate for HUD's table. A fixed-rate loan pays a single lump sum at closing, limited by the first-year rule, and the rest of the principal limit is never available. The lump sum page shows how much that leaves on the table, and the full calculator switches between the two with one click.