What Is a Reverse Mortgage in Canada? What Is a Reverse Mortgage in Canada?

It is not a government program. It is not charity. It is a private lending product offered by four regulated reverse mortgage lenders in Canada, plus Fraction as a shared-appreciation alternative. Your name stays on the title of your home for the entire duration of the loan. Because proceeds are a loan and not income, they are tax-free and do not affect your OAS, GIS, or CPP — though investment income earned on those proceeds can affect GIS.

How a Reverse Mortgage Differs from a Regular Mortgage

With a traditional mortgage, you borrow money to buy a home and then make monthly payments (principal plus interest) to pay it back over 25 or 30 years. Your debt decreases over time as you make payments, and your equity increases.

A reverse mortgage works in the opposite direction. You already own your home. You borrow against the equity you have built up. You make no monthly payments. The interest compounds over time, which means your debt increases and your equity decreases — though home appreciation can offset some or all of that decline.

Here is the key difference in simple terms:

• Traditional mortgage: You make payments to the lender. Debt goes down. Equity goes up.
• Reverse mortgage: The lender pays you. Debt goes up. Equity may go down (depending on home appreciation).

There are no monthly payment obligations with a reverse mortgage. Some borrowers choose to make voluntary interest payments to slow the growth of the loan balance, but this is entirely optional.

Who Qualifies?

The basic eligibility requirements are straightforward:

• Age: You must be at least 55 years old. If you have a spouse or partner on the title, both of you must be 55 or older. The loan-to-value ratio is calculated based on the age of the youngest borrower.
• Homeownership: You must own your home. It must be your primary residence — the place where you live most of the year.
• Property type: Single-family homes, townhouses, condominiums, and some semi-detached properties qualify. The property must meet the lender's minimum value threshold (typically $200,000 to $250,000).
• No income or credit requirements: Unlike a traditional mortgage or a HELOC, reverse mortgage lenders do not require proof of income and do not check your credit score. The loan is secured entirely by the property.

If you have an existing mortgage, it does not disqualify you. The reverse mortgage proceeds are used to pay off the existing mortgage first, and you receive the remainder.

Canada's Reverse Mortgage Lenders (and Fraction)

Unlike the United States, where the government-backed HECM program means hundreds of lenders offer essentially the same product, Canada's reverse mortgage market is entirely private. There are four regulated reverse mortgage lenders, plus Fraction as an alternative:

1. HomeEquity Bank — CHIP Reverse Mortgage

HomeEquity Bank has been offering the CHIP (Canadian Home Income Plan) since the mid-1980s. It is the original Canadian reverse mortgage and remains the dominant player. CHIP is available in all 10 provinces — the broadest geographic coverage of any lender. They accept rural and remote properties that the other lenders will not consider.

CHIP offers the most product variety: a standard reverse mortgage, CHIP Max for higher loan-to-value needs, CHIP Open for short-term bridge financing (6-month term, no prepayment penalty), and Income Advantage for borrowers who want scheduled monthly or quarterly payments. Read the full CHIP guide.

2. Equitable Bank — Reverse Mortgage Flex

Equitable Bank entered the reverse mortgage market in 2018 and immediately disrupted it by offering the lowest rates in Canada. Here is the critical detail: Equitable Bank is broker-exclusive. You cannot walk into a bank branch and apply. You cannot call Equitable directly. The only way to access their product is through a licensed mortgage broker.

This is the single most compelling reason why every Canadian considering a reverse mortgage should work with a broker. Without one, you literally cannot access the lowest-rate option in the country.

Equitable is available in Ontario, British Columbia, Alberta, and Quebec — urban properties only. Read the full Equitable Bank guide.

3. Bloom Finance

Bloom Finance launched in 2019 and brought genuine innovation to the market. Their standout product is Canada's first lifetime fixed-rate reverse mortgage — a rate that locks in for the entire life of the loan, not just a 5-year term. This eliminates renewal risk entirely.

Bloom also offers a unique Prepaid Mastercard that lets borrowers draw against their approved equity on demand, rather than taking a single lump sum. They pay for the appraisal, and they charge no prepayment penalty if you leave because of downsizing, moving to assisted living, or death.

Bloom operates in Ontario, British Columbia, and Alberta. Read the full Bloom Finance guide.

4. Home Trust — EquityAccess

Home Trust entered the reverse mortgage market with their EquityAccess product, offering competitive rates and some of the lowest setup fees in the industry at $995. Like Equitable Bank, Home Trust is broker-exclusive — you must work with a licensed mortgage broker to access their products.

Home Trust offers three products: EquityAccess (their standard reverse mortgage), EquityAccess+ (for higher borrowing needs), and EquityAccess Boost. They are available in Ontario, British Columbia, Alberta, and Nova Scotia. Read the full Home Trust guide.

5. Fraction (Alternative)

Fraction is not technically a reverse mortgage — it is a shared-appreciation model where Fraction participates in your home's future appreciation in exchange for a lower interest rate. It is available to homeowners aged 18 and older (not limited to 55+), making it accessible to a broader audience.

Fraction offers term-based products (3, 4, and 5-year terms in Ontario; 4 and 5-year terms in BC) and charges an origination fee starting at 1%. They operate in Ontario, British Columbia, and Alberta. Because of the shared-appreciation component, the true cost of borrowing depends on how much your home appreciates during the term. Read the full Fraction guide.

For a detailed side-by-side comparison of all five products — including rates, fees, products, and features — see our complete lender comparison. Not sure which lender is best for you? Take our 2-minute lender quiz.

Why Canada Is Different from the United States

If you have researched reverse mortgages online, you have almost certainly encountered American content. Much of it does not apply to Canada and has fuelled many common myths about Canadian reverse mortgages. The differences are significant:

The No-Negative-Equity Guarantee

CHIP, Equitable Bank, Bloom Finance, and Home Trust provide a no-negative-equity guarantee. This means that you — or your estate — will never owe more than the fair market value of your home at the time of sale, as long as you have met the conditions of the mortgage (maintained the property, paid property taxes, kept insurance current). Fraction does not include this guarantee.

How Much Can You Borrow?

The amount you can borrow depends primarily on three factors:

1. Your age (and your spouse's age): Older borrowers can access a higher percentage of their home's value. At age 55, you might access 15-20% of your home's value. By age 85, that could reach 50-55%.
2. Your home's appraised value: The lender will order a professional appraisal. The loan amount is a percentage of this appraised value.
3. Your home's location: Properties in major urban centres may qualify for slightly higher loan-to-value ratios than rural properties.

Typical reverse-mortgage loan-to-value is 15–55%. Select products go up to 59%, and CHIP Max / the preferred-broker path can go as high as 65%.

What Triggers Repayment?

The loan becomes due when any of the following occurs:

• You sell the home
• You move out permanently (it is no longer your primary residence)
• The last surviving borrower passes away
• You default on the mortgage conditions (fail to pay property taxes, let insurance lapse, or allow significant property damage)

When repayment is triggered, the home is typically sold and the reverse mortgage is repaid from the sale proceeds. Any remaining equity goes to you or your estate. If the home has appreciated significantly, there may be substantial equity remaining even after repaying the loan.

Is a Reverse Mortgage Right for You?

A reverse mortgage is a financial tool — not inherently good or bad. It works well for homeowners who are house-rich but cash-poor, who want to stay in their home, and who need access to their equity without the burden of monthly payments. It is not the right choice for everyone, and you should also consider alternatives like HELOCs and downsizing before deciding.

The best next step is to understand how the mechanics actually work, review the honest pros and cons, and then run the numbers for your specific situation. If you want to understand the application process, our step-by-step guide covers everything from initial consultation to funding. You can also browse our glossary for plain-language definitions of key terms.