Reverse Mortgage Renewal: What Happens at Term End

At the end of a 5-year reverse mortgage term in Canada, you choose to renew at the lender’s then-current rate, repay the balance, or sell the home. There is no mandatory move-out at renewal — you remain in the home as long as you meet loan obligations. Prepayment penalties may apply if you repay or switch lenders mid-term, but not at scheduled renewal in most cases.

Why reverse mortgages have 5-year terms

Canadian reverse mortgage products use 5-year fixed terms (except CHIP Open, a 6-month bridge). Interest accrues with no monthly payments, and at term end the lender offers a renewal rate based on market conditions at that time — similar in concept to renewing a conventional mortgage, but without payment pressure.

Your options at term end

1. Renew with the same lender — New 5-year rate; no move required
2. Repay in full — From savings, sale, or other sources
3. Switch lenders — Refinance into another reverse mortgage product (may involve fees)
4. Sell the home — Loan and accrued interest repaid from sale proceeds

See our protection hub article on renewal for borrower safeguards.

Rate risk at renewal

Unlike Bloom’s lifetime fixed SafeRate™ (~6.69% locked for life), most products reset at renewal. If rates are higher at renewal, your balance grows faster going forward even without new draws.

Stress-test renewal scenarios in the equity projection calculator and compare current rates.

Prepayment vs renewal timing

If you plan to sell within a few years of mid-term, prepayment penalties can be significant. CHIP Open avoids penalties for short-term bridge needs. Use the break cost estimator before repaying early.

Estate and family planning

Renewal decisions affect what heirs inherit. Review estate impact projections and our family conversation guide before each renewal window.

Bottom line

Term end is a decision point, not an eviction date. Start reviewing options 90 days before maturity with a broker who can compare all five Canadian lenders.