Reverse Mortgages
Access your home equity with no monthly payments
A reverse mortgage allows Canadian homeowners aged 55 and older to convert up to 55% of their home's value into tax-free cash -- without any monthly mortgage payments required.
Retirement Planning
How reverse mortgages work in Canada
A reverse mortgage is a loan secured against your home that allows you to access a portion of your home equity without selling your property or making monthly mortgage payments. Unlike a traditional mortgage where you make regular payments to the lender, with a reverse mortgage the lender advances funds to you. The loan, plus accumulated interest, is repaid when you sell your home, move out permanently, or the last borrower passes away.
In Canada, reverse mortgages are available from HomeEquity Bank (the CHIP Reverse Mortgage) and Equitable Bank. The amount you can access depends on your age, the location and type of your property, and current market conditions. Generally, older homeowners with higher property values qualify for a larger percentage of their home equity.
Throughout the life of the loan, you retain full ownership and title of your home. You can continue to live in your property as long as you wish, and the reverse mortgage has no impact on your ownership rights. Your only obligations are to maintain the property, keep up with property taxes, and maintain home insurance.
Key Features
Benefits of a Canadian reverse mortgage
No Monthly Payments
Unlike a traditional mortgage, there are no required monthly payments. The loan balance (principal plus interest) is repaid only when you sell, move, or the estate is settled. This preserves your monthly cash flow entirely.
Stay in Your Home
You maintain full ownership and title to your property. There is no requirement to move, and the reverse mortgage does not affect your legal rights as a homeowner. You can stay in your home as long as you wish.
Tax-Free Funds
The money you receive from a reverse mortgage is not considered taxable income. It does not affect your eligibility for Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits, preserving your government entitlements.
Available Age 55+
Both HomeEquity Bank and Equitable Bank require that all borrowers on title be at least 55 years of age. The older you are, the higher the percentage of your home equity you can typically access.
Flexible Fund Access
Receive your funds as a lump sum, scheduled periodic advances, or a combination. This flexibility allows you to tailor the reverse mortgage to your specific financial needs and retirement plan.
No Negative Equity Guarantee
Canadian reverse mortgage providers offer a no negative equity guarantee, meaning you will never owe more than the fair market value of your home at the time of sale (provided you have met all obligations).
Common uses for a reverse mortgage in retirement
Supplementing retirement income
Many Canadian retirees find that their pension, RRSP/RRIF withdrawals, and government benefits do not fully cover their desired lifestyle. A reverse mortgage can bridge this gap by providing additional tax-free income without requiring you to sell your home or downsize. This is particularly valuable for homeowners who are asset-rich but income-constrained.
Home renovations and aging in place
As mobility needs change with age, many homeowners require accessibility modifications -- wheelchair ramps, stairlifts, walk-in tubs, or main-floor bedroom conversions. A reverse mortgage can fund these renovations, allowing you to remain safely and comfortably in your home rather than moving to an assisted living facility, which can cost $3,000 to $7,000+ per month.
Paying off existing mortgages or debts
If you still carry an existing mortgage, line of credit, or other debts in retirement, a reverse mortgage can be used to pay these off entirely, eliminating monthly payment obligations. This immediately improves your monthly cash flow and reduces financial stress.
Providing an early inheritance
Some homeowners use a reverse mortgage to provide financial assistance to their children or grandchildren while they are still alive to see the impact -- helping with down payments, education costs, or other significant expenses. This can be more meaningful and tax-efficient than leaving everything in an estate.
Eligibility requirements
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