A reverse mortgage lets Canadians 55+ borrow against their home equity with no monthly payments. HomeEquity Bank (CHIP) and Equitable Bank are the main Canadian providers. Interest compounds until the home is sold or the owner moves out.
Key considerations
- Maximum borrowing: 30-55% of home value based on age
- Interest rates: typically 2-4 percentage points above conventional mortgages
- No monthly payments, balance grows over time
- Must maintain home insurance, property tax, and condition
- Repayable when sold, owner moves out, or passes away
When it makes sense
Retirees 70+ who want to age in place, have substantial home equity, and need income supplements. Less attractive for younger seniors or those who could downsize to free equity without compounding debt.