What Is a Reverse Mortgage?
A reverse mortgage allows Canadian homeowners aged 55+ to convert a portion of their home equity into tax-free cash โ without selling their home or making monthly mortgage payments. The loan is repaid when the home is sold, you move out, or the estate is settled.
Who Is It For?
Reverse mortgages are ideal for homeowners who are:
- Asset-rich but cash flow constrained in retirement
- Looking to supplement pension or CPP income
- Wanting to help children with a down payment (living inheritance)
- Facing unexpected medical or home repair expenses
- Wanting to eliminate an existing mortgage payment in retirement
How Much Can You Access?
The amount you can access depends on your age, your home's appraised value, and the lender's program. Generally, the older you are and the more valuable your home, the more you can access โ up to a maximum of 55% of your home's value.
The CHIP Reverse Mortgage
HomeEquity Bank's CHIP Reverse Mortgage is Canada's most well-known reverse mortgage product. I also work with Equitable Bank's reverse mortgage program, which offers competitive alternatives. I'll compare options to find the best fit for your situation.
Important Considerations
A reverse mortgage is not right for everyone. The interest accumulates on the loan over time (since no payments are made), which reduces the equity available to your estate. I always discuss this transparently so you and your family can make a fully informed decision. I also recommend discussing reverse mortgages with your family before proceeding.