You keep your home
You still own your home and live in it. It must usually be your primary residence — typically where you live at least six months a year.
Reverse mortgages · Homeowners 55+Stay in your home.
Stay in your home.
Understand every cost first.
A reverse mortgage can turn part of your home equity into tax-free cash without regular mortgage payments. FairChoice walks you — and your family, if you like — through how it works, what it costs and how it affects your estate, and compares it with your other options before you decide.
Homeowners 55+ · Primary residence · Toronto & Ontario
How a reverse mortgage works.
A reverse mortgage is a loan secured by your home that lets you borrow from your home equity without selling. You keep living in your home and you keep ownership of it.
No regular payments
Instead of monthly payments, interest is added to the balance, so the amount you owe grows over time. You can usually repay in full at any time, though early repayment may carry a fee.
Repaid when you move or sell
The balance becomes due when you sell, move out, or the last borrower dies. Your estate usually has a limited time to repay, and each lender sets its own policy.
How much you can borrow — and how you receive it.
You may usually borrow up to 55% of your home’s current value. The maximum depends on your age and the ages of others registered on title, your home’s type, condition and appraised value, and the lender. How you take the money also changes the cost:
One lump sum
You receive the full amount at once and pay interest on all of it. If you don’t need the money right away, this can be an expensive way to borrow.
Part now, the rest later
Some lenders let you take part up front — often with a minimum, typically around $25,000 — and the rest over time. Later draws may carry fees or a change in rate.
Regular payments to you
You receive money on a schedule, typically $1,000 a month or $3,000 every three months, often after an initial amount of around $20,000.
Weigh the benefits against the costs.
A reverse mortgage can solve a real cash-flow problem, but it is usually more expensive than other ways of borrowing against your home. Look at both sides before you decide.
Potential benefits
- No regular payments
- Cash from your home without selling it
- You still own your home
- The money you borrow is tax-free
- It doesn’t affect your OAS or GIS benefits
- Choice of how and when you receive the money
Costs and risks
- Interest rates usually higher than a mortgage or HELOC
- Your home equity goes down as interest accumulates
- Fees such as appraisal, set-up, legal and closing costs
- Prepayment penalties if you repay early
- Your estate must repay within a set period — possibly shorter than the time to settle the estate
- Less to leave to your children or other beneficiaries
You must also keep the home in good repair and follow the contract’s conditions; a default can have serious consequences, including foreclosure.
Compare it with your other options.
Before recommending anything, FairChoice puts a reverse mortgage side by side with the alternatives so you can compare the cost and the effect on your estate.
A home equity line of credit or refinance
Usually a lower rate, but you need to qualify and make regular payments. How refinancing works.
Selling or downsizing
Selling and buying a smaller home, renting, or moving to assisted living can release equity without new debt.
Your current lender’s options
Your existing mortgage or bank may offer something better suited to your situation. We’ll look at that too.
How FairChoice helps.
A conversation with your family
Bring the people you’d like involved. We start with your goals, your timeline and what you want to leave behind.
The full cost, in writing
We review the reverse mortgage options available to you — rates, fees, how you’d receive the money and repayment terms — next to your alternatives.
Independent legal advice
Some lenders require independent legal advice. Even when they don’t, we recommend it, and we coordinate the appraisal, lender and lawyer through to closing.
Reverse mortgage questions, answered.
Who can get a reverse mortgage?
Reverse mortgages are usually for homeowners aged 55 or older. The home must usually be your primary residence — typically where you live at least six months of the year. Each lender sets its own criteria.
How much can I borrow?
You may usually borrow up to 55% of your home’s current value. The amount depends on your age and the ages of others on title, your home’s type, condition and appraised value, and the lender.
Does a reverse mortgage affect my OAS or GIS?
According to the Financial Consumer Agency of Canada, the money you borrow is tax-free and doesn’t affect Old Age Security (OAS) or Guaranteed Income Supplement (GIS) benefits.
What happens when I sell, move or pass away?
The balance must be repaid when you sell your home, move out, or the last borrower dies, or if you default. Your estate usually has a limited time to repay, and each lender sets its own policy — ask about it before you sign.
Can I repay it early?
You can usually repay the principal and interest in full at any time, and lenders often allow partial payments up to a limit. Paying it off early may mean a prepayment fee.
Will there be anything left for my children?
Interest is added to the balance over time, so your home equity — and what your estate receives — usually goes down. Talking it through with your family and getting legal advice before you decide is a good idea.
Let’s talk it through.
Tell us a little about your home and what you need the money for. We’ll explain your options plainly — with no pressure to decide.
Information is general, drawn from Financial Consumer Agency of Canada guidance on reverse mortgages, and is not financial, legal or tax advice. Reverse mortgages are subject to lender approval; amounts, rates, fees and terms vary by lender and borrower. FSRA Licensed Mortgage Brokerage #11387.