Reverse Mortgages in Canada: A Plain-Language Guide for Homeowners 55+

If you're 55 or older and you own your home, you've probably spent decades paying it down. That equity is real money, but until you sell, it just sits in the walls. A reverse mortgage is one way to put it to work without leaving the home you love.

What a reverse mortgage actually is

A reverse mortgage lets you borrow against the equity in your home and take the money tax-free. The part that surprises most people: there are no required monthly payments. The loan, plus interest, is repaid later, usually when you sell the home, move out, or pass it on. Until then, you stay put.

Who can get one

In Canada the basics are simple. Every owner on title needs to be at least 55. The home has to be your primary residence, the place you live for most of the year. And you need enough equity built up, which most long-time owners already have. There's no income test and no credit-score hurdle, because you're not making monthly payments.

How much can you access

Mostly it comes down to your age, your home, and where you live. As a rule, the older you are, the more you can take out, typically up to 55% of your home's value and as high as 59% with some lenders. At 55 you'll see a smaller share. In your 70s and 80s, more. We'll give you a real number for your situation, not a brochure range.

How much should you actually take?

A different question, and the more important one. Interest only accrues on money you've actually drawn, so taking $25,000 a year instead of $300,000 up front keeps your balance far smaller while your investments and your home keep growing. This is how we set most files up, and it's the single biggest lever on what a reverse mortgage ends up costing you. More on that in what's the catch with a reverse mortgage.

The questions we hear most

Do I still own my home?

Yes. You keep title and ownership the whole way through. A reverse mortgage is a loan against your home, not a sale of it. No one takes the keys as long as you live there and keep up with your property taxes and insurance.

Will I leave my kids with a debt?

No. Canadian reverse mortgages come with a no-negative-equity guarantee, which means you'll never owe more than your home is worth when it's sold. Whatever equity is left after the loan is repaid goes to your estate, to your family.

Isn't it expensive?

Interest on a reverse mortgage is higher than on a regular mortgage, because you're not paying it down. That's the trade-off for no monthly payments. We break down every fee and explain the pricing in is a reverse mortgage a rip-off. Sometimes it's the right tool. Sometimes a HELOC or another option fits better.

Is it right for you?

A reverse mortgage isn't for everyone, and anyone who tells you it is should give you pause. It tends to fit homeowners who are asset-rich but cash-poor, people whose CPP and OAS don't stretch as far as they used to, who want to stay in their home, and who'd rather not sell.

It's just as important to know when it doesn't fit. We've written up six situations where we'd tell you not to take one, including the times when selling the house is genuinely the better answer.

Where we come in

We don't work for a lender. We compare the reverse mortgage options in Canada side by side, including the HELOC option, and tell you honestly which one fits, even when it isn't the one that pays us most. Our advice is free and the lender pays us at closing.

Want a real number for your situation? Get a free, no-obligation assessment and we'll walk you through what's possible.