Reverse mortgages, explained properly
Reverse Mortgages in Ontario
Turn part of your home's value into tax-free cash — without selling, without moving, and without a required monthly payment. Here's how it actually works, including the costs and the fine print.
What is a reverse mortgage?
A reverse mortgage is a loan secured by your home, available to Canadian homeowners where everyone on title is 55 or older. Unlike a regular mortgage, you don't make monthly payments. Instead, interest is added to the balance, and the loan is repaid when you sell the home, move out permanently, or from your estate.
You remain the owner. Your name stays on title. You simply owe the lender money — the same as any mortgage — but on a schedule built for retirement.
Who offers them?
In Canada, reverse mortgages are offered primarily by two federally regulated Schedule I banks — HomeEquity Bank (the CHIP Reverse Mortgage family) and Equitable Bank (Flex, Flex PLUS and Flex Lite) — plus newer entrants like Bloom and Home Trust. As licensed brokers in the Dominion Lending Centres network, we compare providers and negotiate for you. Our service is free — the lender pays us.
| Provider | Minimum age | Typical loan-to-value | Notes |
|---|---|---|---|
| HomeEquity Bank (CHIP) | 55 | Up to ~55% | Canada's largest provider; lump sum or scheduled advances |
| Equitable Bank Flex | 55 | 15–55% | Often competitive rates; urban ON/AB/BC/QC |
| Equitable Bank Flex PLUS | 70 | 43–59% | Highest published LTV in Canada; rate premium |
| Equitable Bank Flex Lite | 55 | 15–40% | Lower amounts, sharpest rate; lump sum only |
How much can you get?
The single biggest factor is the age of the youngest person on title. Typical ranges (estimates — your appraisal, property type and location all matter):
| Age of youngest owner | Typical share of home value |
|---|---|
| 55–59 | ~15–22% |
| 60–64 | ~19–27% |
| 65–69 | ~25–34% |
| 70–74 | ~31–41% |
| 75–79 | ~38–48% |
| 80+ | ~44–55% (up to 59% with premium products) |
What does it cost?
- Interest rate: higher than a conventional mortgage — typically in the 6.5%–8.5% range in 2026 versus roughly 4% for the best conventional rates. Rates vary by lender, term, and product; we always show you current lender rate sheets with APR.
- Setup/closing fee: about $995 (Equitable) to $1,795 (CHIP), usually deducted from your advance.
- Appraisal: roughly $350–$600, paid by you.
- Independent legal advice: required by lenders before funding — your own lawyer confirms you understand the contract. Typically a few hundred dollars to about $1,800 depending on the lawyer.
The safeguards
- No-negative-equity guarantee: provided you keep property taxes, insurance and maintenance current, you (or your estate) will never owe more than the home's fair market value.
- You cannot be forced out of your home for missing payments — there are none to miss — as long as those same obligations stay current.
- Mandatory independent legal advice protects you from signing something you don't understand.
- Regulated on every side: the main lenders are federally regulated banks; Ontario mortgage agents and brokerages are licensed by FSRA.
Is it right for you?
Honestly: not always. If you can comfortably qualify for and service a refinance or HELOC, that debt is cheaper. If you're ready to leave your neighbourhood, downsizing releases more equity. A reverse mortgage wins when staying in your home matters, monthly cash flow is tight, or you don't want income-qualification hoops. We'll walk you through all three paths — that's the job.
Frequently asked questions
Who qualifies for a reverse mortgage in Ontario?
Every homeowner on title must be at least 55, the home must be your primary residence, and lenders generally require an appraised value of $250,000 or more. Income and credit play a much smaller role than with a regular mortgage.
How much can I get?
Typically between 15% and 55% of your home's appraised value. The older you are, the more you can access. Property type and location also matter — urban Ontario homes generally qualify for more.
Do I have to make monthly payments?
No. No regular payments are required. Interest is added to the balance and the loan is repaid when you sell, move out, or from your estate. You can choose to pay interest or a portion each year if you prefer.
Is the money taxable? Will I lose OAS or GIS?
No. The money is a loan, not income, so it is tax-free and does not affect Old Age Security or the Guaranteed Income Supplement, according to the Financial Consumer Agency of Canada.
Can I end up owing more than my home is worth?
Canada's reverse mortgage providers include a no-negative-equity guarantee: as long as you keep property taxes, insurance and maintenance current, the amount due at repayment will not exceed the fair market value of your home.
What happens when I pass away or sell?
The loan plus accumulated interest is repaid from the sale proceeds or by your estate — HomeEquity Bank, for example, gives estates about 180 days. Anything left over belongs to you or your heirs.
Figures shown are estimates only — not an offer of credit or a commitment to lend. The amount you may qualify for depends on the lender's assessment of your age(s), property type, location, appraised value and any existing liens. Reverse mortgage lenders require independent legal advice before funding. A reverse mortgage is not suitable for everyone; alternatives include refinancing, a home equity line of credit, or downsizing.