Reverse mortgage rates in CaliforniaHow reverse mortgage rates and pricing actually work
Fixed and adjustable HECMs, the index and the margin, the expected rate that sets how much you can get, and how to compare two quotes line by line. No rate table here: rates change daily, and a published rate that isn’t yours tells you little.
The short answer: an adjustable HECM’s rate is an index plus the lender’s margin. The index is either the 1-year Treasury or the 30-day Average SOFR. Separately, the expected rate, the 10-year Treasury plus the same margin, decides how much the loan can make available: the lower it is, the more you can get. A fixed-rate HECM has one rate set by the lender and is taken as a single lump sum. Jumbo reverse mortgages are priced by each lender and usually fixed.
HECM indexes and the expected rate: 24 CFR §206.21 and HUD Mortgagee Letter 2021-08.
The two numbers that matter on an adjustable HECM
The note rate is what the balance grows by: the index plus the margin, adjusting on schedule within caps. The balance, and any unused line of credit, also grow by the 0.50% annual FHA insurance premium.
The expected rate is used once, at the start, with the youngest borrower’s age, to look up how much of the home’s value the loan can make available. HUD sets a floor under it. This is why a small change in the margin matters twice: it changes both how fast the balance grows and how much you can get on day one.
The margin trade-off
Lenders offer a range of margins. A lower margin means a lower rate and more money available. A higher margin can come with a lender credit that pays some closing costs. Neither is automatically right: for a borrower who will draw little and stay many years, a low margin usually wins; for one who needs the most cash out of pocket at closing, a credit may matter more. I show you the options side by side.
The indexes behind HECM pricing
These are public benchmarks, not rate quotes. Your rate is the index plus a margin, and your APR depends on your loan’s costs. Follow the links for today’s official values.
10-year Treasury (CMT)
Sets the expected rate on adjustable HECMs: the 10-year Treasury rate plus the lender’s margin. Together with the youngest borrower’s age, it decides how much the loan can make available. Lower expected rate, more money.
Today’s value: U.S. Treasury daily yields · Federal Reserve weekly average (FRED)
1-year Treasury (CMT)
One of the indexes an annual-adjustable HECM can use. The note rate is this index plus the margin, reset once a year within the loan’s caps.
Today’s value: U.S. Treasury daily yields · Federal Reserve weekly average (FRED)
30-day Average SOFR
The other common index for adjustable HECMs, published each morning by the Federal Reserve Bank of New York. Lenders may offer it instead of the 1-year Treasury.
Today’s value: New York Fed SOFR averages
Sources: U.S. Department of the Treasury; Board of Governors of the Federal Reserve System (H.15), via FRED®, Federal Reserve Bank of St. Louis; Federal Reserve Bank of New York. The New York Fed is not responsible for the use of the SOFR and SOFR Averages on this page and does not endorse any particular republication.
How to compare two reverse mortgage quotes
- Confirm both are the same program: fixed or adjustable HECM, or jumbo.
- For adjustable HECMs, compare the margin and the expected rate, quoted on the same day.
- Compare the principal limit and the net amount available after costs and payoffs.
- Compare the origination fee, any lender credit, and third-party costs.
- Read the Total Annual Loan Cost (TALC) disclosure every lender must give you; it shows the loan’s cost over different time periods.
As an independent broker, I compare pricing from multiple wholesale lenders for each client instead of offering one lender’s rates. Your actual rate and APR depend on your age, home, loan amount and the program you choose, and I put them in writing before you decide.
Rate questions people ask
Why do reverse mortgage rates online look so different from each other?
Because they are rarely the same thing. Some show a fixed rate, some an adjustable rate at a given margin, some the expected rate used for the loan amount. A lower margin usually means a lower rate and more money available, but it can come with fewer lender credits toward closing costs. Two quotes are only comparable on the same program, the same day’s index and the same credits.
Is a fixed-rate HECM better?
It depends on how you will use the money. A fixed-rate HECM is taken as one lump sum at closing, so it suits a large payoff or purchase. If you want a line of credit that grows, monthly payments, or to draw only what you need, the HECM has to be adjustable.
Does the annual FHA insurance change the rate?
It does not change the note rate, but it is added to it: the balance, and the unused line of credit, grow at the note rate plus the 0.50% annual FHA mortgage insurance premium.
What does the jumbo rate look like?
Proprietary jumbo reverse mortgages are priced by each lender, are usually fixed-rate, and carry no FHA insurance premium. Their rates are typically higher than a HECM’s, which is why I run both on any home near or above the FHA limit.
See what the pricing means for your own home with the reverse mortgage calculator, watch a line of credit grow with the line of credit calculator, or read what a reverse mortgage costs.
Written by Kenneth M. Adler
Every page on this site is written and maintained by me: the same person who answers the phone, runs your numbers, and handles your file start to finish. No call center, no hand-offs, no lead-selling. More about how I work →
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