Imagine this: it’s 1986, and you’re an accountant in Vancouver. You’re watching a growing number of seniors live longer, healthier lives, but many are struggling financially. So, you create a new financial solution that allows them to tap into their home equity while continuing to live in the home they love. That product? The Canadian Home Income Plan is now known as a reverse mortgage.
Fast-forward to 2026, and reverse mortgages have become a powerful tool in the retirement planning toolbox. In fact, usage in Canada has surged by 40% over the past three years alone. With home values rising, inflation impacting day-to-day expenses, and more Canadians choosing to age in place, it’s no surprise that homeowners are looking to their equity to maintain or improve their lifestyle in retirement.
What Is a Reverse Mortgage?
A reverse mortgage allows homeowners aged 55+ to borrow against the equity in their home, without selling or making monthly mortgage payments. The amount you qualify for depends on your age, home value, and location, and typically ranges from 15% to 55% of your home’s value.
You can choose to receive the funds in several ways:
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As a lump sum
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In regular monthly payments
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Through a line of credit-style draw
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Or a combination of the above
To qualify, you must live in the home, maintain the property, and keep property taxes and insurance up to date. Reverse mortgages are also available on multi-unit homes (up to six units), and you may hold more than one reverse mortgage at a time.
The Benefits
One of the standout features of a reverse mortgage is that qualification isn’t based on income or credit score. That means you can unlock your home equity even if you’re retired and no longer working.
Other advantages include:
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You retain full ownership of your home
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No tax on the funds received
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No impact on Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits
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Flexible use of funds—whether for lifestyle, emergencies, family gifts, or debt payoff
Plus, since this is a non-recourse loan, you’ll never owe more than the value of the home when it’s sold.
Common Uses for a Reverse Mortgage
Reverse mortgages can be used however you like. Some common examples include:
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Funding home upgrades or accessibility improvements
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Providing financial support to children or grandchildren
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Purchasing a second property
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Paying off high-interest credit cards or loans
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Supplementing monthly income in retirement
What Does a Reverse Mortgage Cost?
Like any mortgage, reverse mortgages come with two primary costs:
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Interest: Typically 1–2% higher than a traditional mortgage. You can select fixed or variable rates depending on your comfort level and timeline.
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Upfront Fees: These include legal advice, a home appraisal, and setup fees, usually ranging from $1,500 to $3,000. Some lenders may waive or discount these fees during promotional periods.
A mortgage professional can help you compare rates and find the best option for your situation.
Paying It Off
Repayment usually happens:
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When the home is sold
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When the last borrower moves out or passes away
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If you choose to pay the full balance at the end of a term
Like with traditional mortgages, some early repayment fees may apply, so it’s important to understand the terms.
Is It Safe?
Yes. Reverse mortgages are regulated by the Office of the Superintendent of Financial Institutions (OSFI). They also include a No Negative Equity Guarantee, which means the amount owed will never exceed the home’s value upon sale.
They’re backed by credible institutions, including the Ontario Teachers’ Pension Plan, and supported by groups like the Canadian Association of Retired Persons (CARP).
⚠️ Watch for Scams:
Never sign over the title of your home or let a contractor “handle the paperwork” for you. Always work with a licensed mortgage professional.
Are There Alternatives?
Absolutely. Depending on your situation, a few alternatives include:
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Home Equity Line of Credit (HELOC) – offers access to equity but requires income for approval
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Downsizing – sell your home and buy something smaller or rent
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Family-supported financing – borrow from or co-own with relatives
Each option has different costs and implications, so it’s important to compare them carefully.
Ready to Explore Your Options?
Reverse mortgages aren’t for everyone, but they can be a valuable tool for the right person. If you’re 55 or older and looking to unlock home equity to enhance your retirement, let’s talk.
I can walk you through the process, compare options from multiple Canadian lenders, and help you decide what’s best for your needs.
➡️ Book a consultation today.
Let’s make your equity work for you.