A HECM amortization schedule is reverse amortization. The outstanding balance grows by interest under 24 CFR 206.21 and by annual MIP of 0.50% of that balance (Mortgagee Letter 2017-12), usually added monthly. There is no required principal-and-interest coupon. Jay Zayer, a CRMP licensed in California and Arizona, shows families that schedule so they stop expecting a 30-year fixed payoff path.
Suppose the outstanding balance is $100,000. One month of 0.50% annual MIP is about $42, before interest ($100,000 × 0.005 ÷ 12). That is labelled hypothetical arithmetic so the mechanism is visible. It is not a quote of a current note rate, and it is not your Loan Estimate.
The coupon formula, expected rate versus note rate, lives on how reverse mortgage interest is calculated. This page is the growing-balance schedule those pieces create.
What does a reverse-amortization schedule actually list each month?
A typical statement or projection lists a starting balance, new draws, interest, annual MIP, any allowed servicing fee in the documents, voluntary prepayments, and an ending balance. The ending balance is larger than the starting balance whenever accruals exceed prepayments. That is the design.
Interest is charged on the outstanding principal, which already includes prior draws, financed closing costs, and amounts already accrued. 24 CFR 206.21 allows a fixed rate or an adjustable rate tied to an approved index plus a margin. The note states the compounding period. Monthly compounding is common on adjustable HECMs. This page will not publish a current note rate or APR. Your note controls the live coupon.
Annual MIP is a separate add-on. Mortgagee Letter 2017-12 sets it at 0.50% of the outstanding balance. Once that MIP is added, later interest can accrue on the larger figure. Initial MIP of 2.00% of maximum claim amount is a closing charge, usually financed. It is not the 0.50% annual item that keeps appearing on the schedule.
Property charges are not “amortization.” You still pay taxes, insurance, and HOA dues under 24 CFR 206.205. Missing those charges is a default path. It is not a line on the interest schedule.
A longer explainer sits on reverse mortgage amortization.
How do unused line growth and the drawn balance sit on different ledgers?
Contrast two households. One draws a modest line and leaves unused capacity on an adjustable HECM. Unused credit can grow at the note rate plus annual MIP. That growth is capacity you have not borrowed. The other household already drew most of the principal limit. Their schedule is almost all debt. Both can be looking at “growth” and meaning opposite things.
Unused line growth does not reduce the outstanding balance. Drawn balance plus interest plus annual MIP is what heirs later pay, sell through, or refinance. If you draw the whole line on day one, unused growth has nothing left to compound as credit. The schedule then only shows accrual on a large balance.
First-year disbursement limits in 24 CFR 206.25 still decide how much you can take in year one. They do not freeze later accrual. A LESA, if one exists, was set at origination. It is not a monthly credit that shrinks the schedule.
Estimate proceeds and the cost stack before you treat unused capacity as if it were cash in the bank. The illustration column used here is 7.000%, dated 22 September 2026. That number selected the original principal-limit factor. It does not reprint each month as the coupon. This page will not publish a current PLF percentage.
Why does the schedule never march the balance back to zero while you occupy?
A forward 30-year fixed amortizes because you send a required P&I payment that covers interest and some principal. A performing HECM does not require that coupon. You may prepay. Voluntary payments reduce the balance and therefore future accrual. HUD does not require those payments as a bill.
Because required P&I is absent, the schedule is not a countdown. It is a running total. Tenure or term payments add to the balance as they are made. Line draws add on the day they fund. Accrual continues between draws. The loan becomes due when 24 CFR 206.27(c) says it does: death of the last borrower, conveyance, occupancy failure, or property-charge failure, among the listed events. Due-and-payable is not the same as “the schedule reached zero.”
Non-recourse under 24 CFR 206.27(b)(8) limits what the house, not the kids’ other assets, must cover in the usual insurance case. It does not make the monthly schedule shrink. Heirs who keep the house generally pay the outstanding balance. Heirs who sell generally meet the 24 CFR 206.125 sale rules, including the 95% floor when that subsection applies.
What can go wrong: an adult child reads last year’s statement, sees unused credit up, and tells siblings “the loan is paying itself down.” The unused line grew. The drawn balance also grew. Those are different columns.
A follow-up: if you send the interest each month, does the schedule behave like a forward interest-only loan? Interest-only prepayments can hold the balance nearer to the last draw. Annual MIP of 0.50% still adds unless you also cover that accrual. The note still does not require the payment. Missing a voluntary extra payment is not a coupon default. Missing taxes is.
Who should not read a HECM statement as if it were a 30-year fixed?
This schedule does not help heirs who think it amortizes to zero like a 30-year fixed. It will not. The balance grows while someone occupies and draws, or even while they occupy and never draw again. Jay will walk the statement. He will not promise a hidden payoff date.
It also does not help a household that needs the balance frozen while they live in the house and also take monthly draws. Draws plus interest plus annual MIP move the number up. A sale, a smaller draw plan, or a forward loan with a real coupon may be cleaner. I work with multiple lenders. I still say when the growing schedule is the wrong picture for the family.
Another failure: treating a projection to age 85 as leftover-equity insurance. Values move. ARM coupons move inside the caps. Request a current payoff from the servicer, not a memory of closing day.
A HECM is FHA-insured. It is not a government benefit and it is not a self-amortizing mortgage. The schedule grows until a due-and-payable event or a voluntary payoff closes it.