Turn home equity into greater financial flexibility.
A reverse mortgage may allow eligible Canadian homeowners to access part of the equity in their home—without selling it and generally without required monthly mortgage payments.
At a glance
Home ownership remains with you, subject to the mortgage terms.
Funds may be available as a lump sum or, with some products, over time.
Optional prepayments may be available, depending on the lender and product.
Eligibility and amount depend on age, property, location and lender guidelines.
Typical minimum age for many reverse mortgage programs
Remain the owner of your home while the mortgage is in place
Retirement cash flow, debts, renovations, family support and more
Mortgage advice plus independent legal advice before funding
What is a reverse mortgage?
A reverse mortgage is a loan secured against your home. Instead of selling your property to access equity, you may be able to borrow against a portion of its value and receive funds while continuing to live in and own the home.
You continue to own your home. The reverse mortgage is registered against the property, much like other secured lending.
The amount available is based on factors such as your age, the appraised value and location of the home, and current lender guidelines.
Depending on the product, funds may be advanced as a lump sum, scheduled payments, future draws, or a combination.
How can the funds be used?
Reverse mortgage proceeds can support a wide range of personal goals. Common uses include:
- ✓Improve retirement cash flow
- ✓Pay off an existing mortgage or other debts
- ✓Help manage the rising cost of living
- ✓Renovate, repair or adapt the home
- ✓Cover unexpected expenses or in-home care
- ✓Provide a financial gift to family
- ✓Help with the purchase of another property
- ✓Travel or fund lifestyle priorities
How much could you access?
The answer depends on the lender. Age, appraised property value, property type, location and existing secured debt all matter.
Some lender programs may allow up to about 59% of the home's value.
That maximum is not available to every borrower. Higher available percentages may apply only at older ages and remain subject to lender discretion and lending criteria.
Important: A reverse mortgage is not “free money.” Interest accrues on the outstanding balance, so the equity remaining in the home may decrease over time.
A clear, guided process
A mortgage professional can help you understand the options, compare lender criteria and prepare the file. The exact process varies by lender and transaction.
Discuss your goals, age, property, existing mortgage or debts and how you want to use the funds.
Provide identification and property information. An appraisal is commonly required.
The lender reviews the property and borrower information and confirms the available amount and terms.
An independent lawyer explains the mortgage documents, rights, obligations and legal effect before funding.
Once conditions and legal requirements are satisfied, funds are advanced according to the chosen product structure.
Benefits — and responsibilities
The right decision comes from understanding both sides. A reverse mortgage can create flexibility, but it also affects the equity in your home and comes with ongoing obligations.
| Potential benefit | What to keep in mind |
|---|---|
| No required regular mortgage payments with many reverse mortgage products. | Interest accrues on the outstanding balance and may compound over time. |
| You continue to own and live in your home. | You must continue meeting mortgage obligations, which commonly include keeping property taxes and home insurance current and maintaining the property. |
| Funds can support retirement, debt repayment, renovations or family goals. | Borrowing against home equity reduces the portion of equity available later, all else being equal. |
| Some programs offer flexible advances and optional prepayments. | Prepayment privileges and charges vary by lender, product and timing. |
| Some lender programs include a no-negative-equity guarantee. | Guarantees are subject to specific mortgage obligations and lender terms. |
Product features, lending areas, fees, rates, prepayment privileges, maximum loan-to-value and qualification rules change over time. Current lender guidelines should be confirmed before making a decision.
Frequently asked questions
Will I still own my home?+
Yes. A reverse mortgage is registered against the property, but ownership is not transferred to the lender merely because you have a reverse mortgage.
Do I need to make monthly mortgage payments?+
Many reverse mortgage products do not require regular monthly mortgage payments. Optional payments or prepayments may be available, subject to the lender's terms.
What if I already have a mortgage?+
An existing mortgage generally needs to be paid out so the reverse mortgage can be registered in the required priority. Reverse mortgage proceeds may be used for that payout, subject to approval and sufficient proceeds.
When does the reverse mortgage have to be repaid?+
This depends on the lender. Common triggering events can include sale or transfer of the property, the last borrower permanently leaving the home, the last borrower passing away, or default under the mortgage terms.
Is independent legal advice required?+
Many lenders require independent legal advice before funding so the borrower receives an impartial explanation of the nature and effect of the mortgage documents.
Is a reverse mortgage right for everyone?+
No. It should be compared with alternatives such as refinancing, a HELOC, downsizing, selling, or using other retirement assets. Suitability depends on cash flow, goals, time horizon, estate intentions and the property.
Request a confidential reverse mortgage review
There is no substitute for reviewing the numbers in the context of your home, goals and retirement cash flow. Reach out with a few basic details and we can help you identify which options may be worth comparing.
Rolando Puerto Villa
Mortgage Agent Level II, FSRA Lic. M08001739
Mortgage Intelligence · Brokerage #10428
416.908.5453 · rolando.villa@mortgagevilla.ca
Let's find out what you actually qualify for.
No cost, no obligation, and a real answer within a day.
General information only. This webpage is not a commitment to lend and is not legal, tax, investment or financial planning advice. Mortgage approval is subject to lender underwriting and applicable guidelines. Borrowers should obtain independent legal advice and, where appropriate, independent tax and financial advice.