How the HECM Early Payoff Calculator Works
Korea's reverse mortgage ("jutaek yeongeum") works much like the U.S. Home Equity Conversion Mortgage (HECM): instead of paying anything monthly, the homeowner receives payments while the loan balance grows with accrued interest and mortgage insurance premiums. Ending it early means repaying everything received plus interest and fees in one lump sum.
This calculator estimates that payoff using real HECM terms: a 2% upfront mortgage insurance premium (MIP) based on your home's value, and an ongoing 0.5% annual MIP charged on the outstanding balance, on top of the interest rate on your HECM (which is typically adjustable). Enter your monthly payment, months received, interest rate, and home value to see cumulative principal, estimated accrued interest, total MIP, and the full payoff amount.
This uses an average-balance approximation rather than true daily compounding, so treat it as a planning estimate. One key HECM protection: because it's a non-recourse loan, you or your heirs never owe more than the home's appraised value at repayment, even if the calculated payoff is higher -- contact your loan servicer for the exact current payoff quote.
Frequently Asked Questions
It's your cumulative payments received plus accrued interest, the 2% upfront mortgage insurance premium (MIP), and the 0.5% annual MIP charged on the outstanding balance -- this calculator uses an average-balance approximation.
Yes. To end a HECM early and keep the home, you or your heirs must repay the full loan balance, which is capped at the home's appraised value or the loan balance, whichever is less, thanks to non-recourse protection.