This week only Treasury-based HECM’s with a margin of +260 or less can pay the HECM maximum Principal Limit. Ditto for LIBOR-based HECM’s with margins of +249 or less. Current margins are higher than these figures. This week fixed-rate HECM’s range from 5.56% to 7.250%.

Using this week’s rates, the first table shows max rates or margins before the next drop in the Principal Limit factor. The percentage drops in the table are for a 74-year old borrower (the average HECM age). How to read the table:

• A 5.81% fixed-rate HECM gives 3.0% less than the max HECM benefit.
  A 3.00% margin HECM LIBOR gives 7.2% less than the max HECM benefit.
  A 3.50% margin HECM Treasury gives 11.5% less than the max HECM benefit.

So this week a L+300 dominates a T+350.

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