What Ontario homeowners aged 55 and older should know before considering a reverse mortgage
For many Ontario homeowners, the family home represents their largest financial asset — yet much of that value may be tied up in equity. A reverse mortgage is one option that allows eligible homeowners to access some of that equity without selling their home or making monthly mortgage payments. However, reverse mortgages are not suitable for everyone, and understanding how they work — and their long-term impact — is essential before making any decisions.
What a reverse mortgage is
How reverse mortgages work in Canada
The potential benefits and drawbacks
Who they may be appropriate for
What alternatives should also be considered
30-second overview
Straightforward guidance to help you make confident mortgage decisions
A reverse mortgage is a loan available to Canadian homeowners aged 55 or older that allows them to borrow against the equity in their home while continuing to live there Unlike a traditional mortgage:
No monthly mortgage payments are required
Interest is added to the loan balance over time
The loan is typically repaid when the home is sold or the homeowner moves out permanently
The amount a homeowner can borrow depends on several factors, including age, home value, property location, and current interest rates.
Reverse mortgages in Canada are federally regulated and offered by a small number of specialized lenders.
Key features include:
Funds are generally tax-free
Homeowners retain ownership of their home
Property taxes and maintenance must remain up to date
Independent legal advice is required before funding
Interest rates are higher than traditional mortgages
The loan balance increases over time
Home equity is reduced
Less value may remain for your estate
Early repayment penalties may apply
Not all properties qualify
Understanding these trade-offs is critical before proceeding.
A reverse mortgage may be worth exploring if you:
Are 55 or older
Plan to remain in your home long-term
Have significant home equity
Prefer not to make monthly mortgage payments
Plan to sell your home in the near future
Have strong cash flow already
Are focused on preserving maximum estate value
Qualify for lower-cost financing options
Downsizing or selling
Traditional refinancing
Home equity lines of credit (HELOCs)Alternative lending solutions
Family-supported financing strategies
Each option carries different costs, risks, and long-term implications.
Reverse mortgages are complex financial products, and the right decision depends on your personal goals, finances, and long-term plans.
Speaking with an independent mortgage professional can help you:
Understand how a reverse mortgage would work in your situation
Compare it to alternative options
Avoid rushed or pressured decisions
Gain clarity before making commitments
If you’re considering a reverse mortgage — or simply want to better understand your options — a conversation can help bring clarity.You don’t need to decide anything today.
You just need the right information.
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