Who this is for: Homeowners 55+, their adult children, and financial planners, estate lawyers and accountants.
Eligibility and age requirements
In Canada, reverse mortgages are available to homeowners aged 55 or older. Where there are two owners, the age of the youngest owner on title is used in the calculation. The home must be your principal residence.
How much you can borrow
The amount depends on your age, the property's appraised value, its type and location, and the lender. Lenders in Canada currently cap reverse mortgages at a maximum of 50% of the home's value; most borrowers qualify for less, especially at younger ages.
Funds can usually be taken as a lump sum, in scheduled advances, or a combination. Any existing mortgage on the home is generally paid out first.
Interest
Reverse mortgage rates are higher than conventional mortgage rates. Because no payment is required, interest is added to the balance and compounds over time — the balance grows the longer the loan is in place.
Repayment and sale of the property
The loan becomes due when the last borrower sells, moves out permanently, or dies. You keep ownership of the home. The balance is normally repaid from the sale proceeds or by the estate refinancing.
You must keep paying property taxes and home insurance and keep the property in reasonable repair. Repaying early can trigger a prepayment penalty, particularly in the first years.
Estate considerations
A reverse mortgage reduces the equity left in the home. Whether the estate's share shrinks in dollars depends on whether the home appreciates faster than interest accrues, which no one can guarantee. Discuss plans with family and your estate lawyer before arranging one.
CHIP and other Canadian reverse mortgage products
HomeEquity Bank offers the CHIP Reverse Mortgage, and Equitable Bank offers the Flex and Lump Sum reverse mortgages. Product features, rates and fees differ and change; compare current written terms rather than advertised headlines.
Alternatives
A reverse mortgage is not always the best choice. Compare it against:
| Option | Monthly payment | Main trade-off |
|---|---|---|
| Reverse mortgage | None required | Balance grows; estate equity shrinks |
| HELOC | At least interest | Requires qualifying income; payments required |
| Conventional refinance | Principal and interest | Requires qualifying income |
| Downsizing / selling | None | Moving costs and leaving the home |
| RRIF / LIRA withdrawal | None | Taxable as income in the year withdrawn |
Sources
Cite this resource
Preferred title and URL for journalists and organizations:
Saminder (Sami) Juneja. “Reverse Mortgages in Canada: A Homeowner's Guide.” The Juneja Group, updated 2026-09-29. https://thejunejagroup.ca/guides/reverse-mortgage-guide