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Reverse Mortgage

Reverse Mortgages in Canada (Age 55+)

A reverse mortgage lets a homeowner 55 or older turn some of their home equity into tax-free cash without selling and without making a monthly payment. It’s a real tool for the right situation, but the interest compounds and eats into your equity, so it needs an honest look before you sign.

Quick answer: A reverse mortgage is a loan for Canadian homeowners aged 55+ secured against your home. You can access up to roughly 55% of your home’s value as tax-free cash, you keep title and stay in the home, and there are no required monthly payments. The balance (loan plus compounding interest) is repaid when you sell, move out, or pass away. Because nothing is paid down, the debt grows over time, so it works best when you plan to stay put and have weighed it against a HELOC or downsizing.
55+
minimum age (both owners)
~55%
of home value, max access
$0
required monthly payment
3
Canadian providers

How a reverse mortgage works

You borrow against the equity you’ve already built, and instead of paying the lender each month, the interest is added to the balance. The amount you qualify for depends on your age, your home’s appraised value and location, and the lender. The older you are, the more you can typically access. You take the money as a lump sum, in scheduled advances, or a mix of both.

You stay on title and keep living in your home. You still have to pay property taxes, keep the home insured, and maintain it in good shape, but there’s no mortgage payment to make. The loan comes due when the last borrower sells, moves out (for example into long-term care), or passes away.

The honest trade-off: compounding interest

This is the part that gets glossed over, so here it is straight. Because you make no payments, the interest compounds on a growing balance. Reverse mortgage rates also run higher than a regular mortgage or a HELOC. Over ten or fifteen years that can consume a large slice of your equity, which means less left for you later or for your heirs. Two protections soften the risk: it’s a “no negative equity guarantee” product, so as long as you keep your taxes and insurance current, you (or your estate) never owe more than the home’s fair market value at the time it’s sold.

Who provides reverse mortgages in Canada

Only a few lenders offer them, and a broker can compare rates and terms across all of them rather than sending you to one brand.

The three main providers
ProviderProductNotes
HomeEquity BankCHIP Reverse MortgageThe oldest and best-known; widest availability
Equitable BankReverse Mortgage / FlexOften competitive rates in larger urban markets
BloomBloom Reverse MortgageNewer entrant; another option to compare

Reverse mortgage vs. the alternatives

A reverse mortgage isn’t the only way to tap equity, and it isn’t always the best one. If you have steady income and good credit, a HELOC or a regular refinance usually costs far less because you pay the interest down. The catch is that both require qualifying income and monthly payments, which is exactly what pushes some retirees toward a reverse mortgage in the first place. Downsizing frees up equity too, but it means moving. The right answer depends on your income, how long you plan to stay, and how much the estate matters to you.

Quick comparison
OptionMonthly paymentBest when
Reverse mortgageNone requiredYou’re 55+, want to stay, income is tight
HELOC / refinanceYesYou can qualify and want lower cost
DownsizingNoneYou’re open to moving to a smaller home

How a Calgary mortgage broker helps

  • Compare all three reverse mortgage lenders on rate, terms and how much you can access
  • Run the real numbers so you see how the balance grows over 5, 10 and 15 years
  • Pressure-test whether a HELOC, refinance or downsizing would serve you better
  • Coordinate with your family and, when it matters, your lawyer or advisor
  • It’s free, with no credit hit to start and no obligation.

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Frequently asked questions

How much can I borrow with a reverse mortgage?
You can typically access up to about 55% of your home’s appraised value. The exact amount depends on your age, your home’s value and location, and the lender. The older you are, the higher the percentage you generally qualify for.
Do I still own my home?
Yes. You stay on title and keep living in your home. You must continue to pay property taxes, keep the home insured, and maintain it. The lender is repaid only when the last borrower sells, moves out, or passes away.
Will I owe more than my home is worth?
No, as long as you keep your property taxes and insurance current and maintain the home. Reverse mortgages in Canada carry a no-negative-equity guarantee, so you or your estate will never owe more than the home’s fair market value when it’s sold.
Is the money taxable?
No. The cash you receive from a reverse mortgage is tax-free and does not count as income, so it won’t affect Old Age Security or Guaranteed Income Supplement benefits. Speak with your accountant about your specific situation.
What’s the catch with the interest?
Because you make no monthly payments, the interest compounds and is added to a growing balance, and reverse mortgage rates are higher than a regular mortgage or HELOC. Over many years this can consume a significant portion of your equity, leaving less for you later or for your heirs.
Is a HELOC or downsizing better for me?
It depends. If you have qualifying income and good credit, a HELOC or refinance usually costs far less because you pay down the interest. Downsizing frees up equity without debt but means moving. A reverse mortgage fits best when you’re 55+, want to stay in your home, and monthly payments aren’t workable. A broker can model all of them for you.

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This article is general information, not financial, mortgage or legal advice. Rates, programs and rules change and depend on approval. Please speak with a licensed mortgage professional about your situation. Mortgages for Less with INDI Mortgage.