🇨🇦 Canada Reverse Mortgage Guide (2026)

A Reverse Mortgage is a financial option that allows eligible homeowners to convert part of their home equity into cash while continuing to live in their property.

This guide briefly explains how reverse mortgages work in Canada, who they may be suitable for, and important factors to consider before applying.

What Is a Reverse Mortgage

A reverse mortgage is a loan designed specifically for older homeowners.

Unlike traditional mortgages, reverse mortgages typically do not require monthly repayments. The loan is usually repaid when one of the following occurs:

• The home is sold
• The homeowner permanently moves out
• The homeowner passes away

Key features include:

• No required monthly mortgage payments
• Homeowners can continue living in their property
• The loan is secured by the home's value
• It can provide additional funds for retirement

How Much Money Can Be Accessed

In Canada, the amount available usually depends on several factors:

• The homeowner’s age
• The market value of the property
• The location of the home
• Current interest rate conditions

In many cases, homeowners may access approximately 20% – 55% of their home’s value.

Example:

Home value: CAD $700,000
Estimated available funds: CAD $140,000 – $385,000

Funds can typically be received in several ways:

• A lump-sum payment
• Scheduled payments
• Flexible withdrawals when needed

Major Reverse Mortgage Providers in Canada

Currently, reverse mortgages in Canada are mainly offered by two financial institutions.

HomeEquity Bank

• Provides the CHIP Reverse Mortgage
• Designed for homeowners aged 55 and older
• Typically no monthly payments required

Equitable Bank

• Provides the Flex Reverse Mortgage
• Offers flexible withdrawal options
• Funds can be taken as a lump sum or in stages

Who May Consider a Reverse Mortgage

A reverse mortgage may be suitable for homeowners who:

• Are 55 years or older
• Own a home in Canada
• Have significant home equity
• Want additional retirement cash flow
• Prefer to remain living in their current home

Funds may be used for various purposes, such as:

• Daily living expenses
• Home renovation or maintenance
• Medical or healthcare costs
• Supporting retirement lifestyle needs

Important Things to Know Before Applying

Before applying for a reverse mortgage, it is important to understand the following points.

Interest accumulates over time

Since monthly payments are typically not required, interest continues to build over the life of the loan.

Home equity may decrease

When the property is eventually sold, the remaining equity may be lower.

Additional fees may apply

The process may involve:

• Property appraisal fees
• Legal fees
• Loan setup costs

Exploring Whether It May Be the Right Option

For retirees who own property in Canada, a reverse mortgage can be one way to access additional funds without selling the home.

Many lenders provide simple online tools where homeowners can enter basic information such as:

• Property location
• Estimated home value
• Homeowner’s age

This initial estimate can help homeowners better understand the potential financial flexibility their home equity may provide and support more informed retirement planning.