Unlock Your Retirement Equity Tax-Free
Access up to 55% of your home's value with no monthly payments. Stay in your home and enjoy retirement on your terms.
What Is a Reverse Mortgage?
A reverse mortgage allows Canadian homeowners aged 55 and older to convert part of their home equity into tax-free cash without selling their home or making monthly mortgage payments. It's designed specifically for retirement, providing financial flexibility while letting you stay in the home you love.
Unlike a traditional mortgage where you make payments to the lender, with a reverse mortgage, the lender pays you. The loan, plus accumulated interest, is repaid when you sell the home, move out permanently, or pass away. Until then, you maintain full ownership and can live in your home as long as you wish.
For many Ontario seniors, a reverse mortgage provides the financial freedom to enjoy retirement without the stress of downsizing or the pressure of monthly payments. Whether you need funds for healthcare, home renovations, travel, helping family, or simply supplementing retirement income, a reverse mortgage offers flexibility that other options may not provide.
How Reverse Mortgages Work
You Receive Funds
Access up to 55% of your home's value as a lump sum, regular payments, or a combination. The exact amount depends on your age, home value, and location.
Stay in Your Home
You retain full ownership and continue living in your home. No need to downsize, move, or make lifestyle changes you don't want.
No Monthly Payments
Unlike traditional mortgages or HELOCs, you don't make monthly payments. The loan is repaid when you leave the home.
Protected Inheritance
Any remaining equity after the loan is repaid goes to your heirs. The "no negative equity guarantee" ensures they'll never owe more than the home's value.
Benefits of a Reverse Mortgage
Tax-Free Income
Funds received are not taxable income and won't affect OAS, GIS, or other government benefits.
No Monthly Payments
Preserve your retirement cash flow without monthly mortgage payment obligations.
Maintain Ownership
You remain on the title, can renovate, and continue living in your home as long as you wish.
Flexible Use of Funds
Use the money for anything: healthcare, travel, home modifications, helping family, or daily expenses.
No Repayment Until You Leave
The loan is only repaid when you sell, move to long-term care, or pass away.
Guaranteed Protection
You'll never owe more than your home's fair market value, protecting both you and your heirs.
Who Qualifies?
Reverse mortgage eligibility in Canada is straightforward:
- Age: All homeowners on title must be 55 years or older
- Property: Must be your primary residence in Canada
- Equity: Sufficient home equity (existing mortgages are paid off from proceeds)
- Property Condition: Home must be in reasonable condition and marketable
Notably, there are no income requirements and no credit score minimums. The loan is secured entirely by your home equity, making it accessible to seniors who might not qualify for traditional financing.
Payout Options
Lump Sum
Receive all funds at once. Ideal for paying off existing mortgage, major purchases, or one-time expenses.
Scheduled Payments
Regular monthly or quarterly payments. Perfect for supplementing retirement income on an ongoing basis.
Combination
Initial lump sum plus regular payments, or draw funds as needed. Maximum flexibility for varying needs.
Important Considerations
Interest Accumulation
Since you don't make payments, interest compounds over time. The loan balance grows, reducing your remaining equity.
Higher Interest Rates
Reverse mortgage rates are typically higher than traditional mortgages due to the deferred repayment structure.
Impact on Estate
The loan must be repaid from the estate, which may reduce inheritance for heirs. Discuss with family.
Costs and Fees
Setup costs include appraisal, legal fees, and administration fees. These are typically deducted from proceeds.
Obligations Remain
You must maintain the property, pay property taxes, and keep home insurance current to stay in good standing.
Real Reverse Mortgage Scenarios
Supplementing Retirement Income
Margaret, 72, in Oakville has a $750,000 home fully paid off. Her pension and OAS provide $2,800/month, but she wanted more comfortable living. She accessed $200,000 through a reverse mortgage, taking $1,500/month in scheduled payments. This supplements her income without affecting her government benefits.
Monthly supplement: $1,500 | No impact on OAS/GIS
Healthcare & Home Modifications
George and Helen, both 78, needed $80,000 for accessibility renovations (stairlift, bathroom modifications, widened doorways) to age in place safely. Their Toronto home was worth $1.1M. The reverse mortgage provided funds for renovations plus a reserve for future healthcare needs—all without monthly payments straining their fixed income.
Renovation funds: $80,000 | Healthcare reserve: $50,000
Helping Family
Robert, 68, in Burlington wanted to help his daughter with a down payment on her first home. Rather than selling his $650,000 home, he accessed $100,000 through a reverse mortgage as a lump sum gift to his daughter. He continues living in his home while watching his grandchildren grow up in the neighborhood.
Gift to daughter: $100,000 | Remained in family home
* These scenarios are illustrative examples. Actual amounts and terms vary by individual situation.
Frequently Asked Questions
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Mortgage Agent Level 1 | Dominion Lending Centres | License #M23005941
Reverse mortgages have implications for your estate and long-term finances. Independent legal advice is required. Contact us for personalized guidance based on your specific situation.