Frequently Asked Questions

A reverse mortgage is a loan secured against the value of your home that lets Canadian homeowners aged 55+ access up to 55% of their home equity as tax-free cash. Unlike a traditional mortgage, you don't make monthly payments. The loan (plus accrued interest) is repaid when you sell, move out permanently, or pass away.

To qualify you must be at least 55 years old (all borrowers on title), own a Canadian residential property, and the property must be your primary residence. The home must meet minimum value requirements — typically $200,000 to $250,000 depending on the lender. All four Canadian reverse mortgage lenders — CHIP, Equitable Bank, Bloom, and Home Trust — require that any existing mortgages or secured debts be paid off from the reverse mortgage proceeds. Fraction (a reverse mortgage alternative) has no age requirement but uses a different shared appreciation model.

You can typically access between 15% and 55% of your home's appraised value. The exact amount depends on your age (older borrowers qualify for more), your home's value and location, and which lender you choose. Use our free calculator to get an estimate — no personal information required.

As of early 2026, 5-year fixed rates range from approximately 6.44% (Equitable Bank Flex Lite) to 7.29% (CHIP Income Advantage). Rates vary by lender, product, and loan-to-value ratio. Equitable Bank generally offers the lowest rates, while Bloom offers a unique lifetime fixed rate that never changes for the life of the loan. Home Trust (newest entrant, launched Oct 2025) offers competitive broker-exclusive rates — ask your broker for current pricing. Fraction (not a reverse mortgage) uses an appreciation-based rate starting at 7.09% in Ontario.

No. Every Canadian reverse mortgage contract includes a no-negative-equity guarantee. You retain full ownership of your home and can never be forced to move as long as you maintain the property, pay property taxes and insurance, and the home remains your primary residence. This guarantee means you will never owe more than the fair market value of your home.

When the last surviving borrower passes away, the estate has a set period (typically 6 to 12 months) to repay the loan — usually by selling the home. Any remaining equity after the loan is repaid belongs to your heirs. Thanks to the no-negative-equity guarantee, your estate will never owe more than the home's fair market value, even if the loan balance has grown larger.

No. Reverse mortgage funds are considered a loan advance, not income. They are not reported as taxable income and do not affect your Old Age Security (OAS), Guaranteed Income Supplement (GIS), Canada Pension Plan (CPP), or any other government benefits. This is one of the key advantages over strategies like RRIF withdrawals or selling investments.

No. Since a reverse mortgage is a loan (not income), the money you receive is completely tax-free. There are no tax implications when you receive the funds, and you don't need to report them on your tax return.

Setup costs vary by lender: CHIP charges $1,795–$2,995, Equitable Bank charges $995, Bloom charges approximately $2,300, and Home Trust's fees are disclosed through brokers. These fees cover administration, appraisal, and processing. You will also need to pay for independent legal advice (ILA), which typically costs $300–$700. Some lenders cover the appraisal cost. Fraction charges a 2.5% origination fee plus appraisal and legal fees. There are no ongoing monthly fees with any option.

Independent Legal Advice is a requirement for all Canadian reverse mortgages. You must meet privately with a lawyer (or notary in Quebec) who is not connected to the lender. The lawyer ensures you fully understand the loan terms, your obligations, and the impact on your estate. This protects borrowers and is paid for by the borrower, typically $300–$700.

It depends on your situation. Equitable Bank (Flex) offers the lowest known rates and fees but is broker-exclusive. CHIP (HomeEquity Bank) is available in all 10 provinces with the most product flexibility. Bloom Finance offers Canada's only lifetime fixed rate and a Prepaid Mastercard. Home Trust (EquityAccess) is the newest entrant and may offer competitive pricing. Fraction is an alternative for borrowers under 55 or those who prefer a shared appreciation model. A licensed mortgage broker can compare all options based on your needs.

You are not required to make any payments during the life of the loan — that's the whole point. However, some lenders do allow optional payments. With Bloom, you can choose to make monthly interest payments to keep the balance from growing. With CHIP and Equitable, you can prepay but may face penalties depending on the product and timing. CHIP Open has no prepayment penalty within 6 months.

The process typically takes 3–6 weeks: 1) Initial consultation with a broker or lender to determine eligibility and estimate your amount. 2) Full application and property appraisal. 3) Receive and review the commitment letter. 4) Complete Independent Legal Advice with your own lawyer. 5) Closing and funding. A licensed broker can guide you through the entire process and compare offers from all three lenders.

CHIP is available in all 10 provinces (ON, BC, AB, QC, MB, SK, NS, NB, PE, NL). Equitable Bank is available in BC, AB, ON, and QC (urban properties only). Bloom and Home Trust are available in ON, BC, and AB. Fraction (alternative) operates in ON, BC, and AB. No reverse mortgages are currently available in the three territories (YT, NT, NU). If you're outside the Big Four provinces, CHIP is your only reverse mortgage option.

A HELOC (Home Equity Line of Credit) requires monthly interest payments and can be called in (demanded in full) by the lender at any time. You also need to requalify regularly and could lose access if your income drops. A reverse mortgage has no monthly payments, cannot be called in, and doesn't require income qualification. However, HELOC rates are lower. If you can afford the payments, a HELOC may be cheaper; if cash flow is the issue, a reverse mortgage provides certainty.

Consider: downsizing to a less expensive home, a Home Equity Line of Credit (HELOC) if you can handle the payments, a conventional mortgage refinance, selling to a family member and renting back, provincial property tax deferral programs, or drawing from RRSPs/RRIFs. Each option has trade-offs. A reverse mortgage is often the best fit when you want to stay in your home and cannot qualify for or afford traditional borrowing.

In Canada, reverse mortgage interest compounds semi-annually (twice per year) as required by the federal Interest Act. This means interest is calculated on the outstanding balance plus previously accrued interest every six months. Over a long period, compounding can significantly increase the total amount owed — which is why it's important to use our calculators to see projected balances over 5, 10, and 20+ years.

Yes, but your existing mortgage must be paid off from the reverse mortgage proceeds first. For example, if you qualify for $200,000 and owe $50,000 on your current mortgage, the $50,000 is paid off at closing and you receive the remaining $150,000. This is actually one of the most common uses — eliminating mandatory monthly mortgage payments to improve cash flow.

All three Canadian reverse mortgage lenders offer a no-negative-equity guarantee. This means that even if your home's value declines and the loan balance exceeds what the home is worth, you (or your estate) will never owe more than the fair market value at the time of sale. The lender absorbs the loss. This is a significant consumer protection unique to Canadian reverse mortgages.

You can go directly to CHIP (HomeEquity Bank) or Bloom Finance. However, Equitable Bank — which offers the lowest rates in Canada — is exclusively available through licensed mortgage brokers. This means the only way to compare all three lenders is by working with a broker. A good broker costs you nothing extra (they are compensated by the lender) and ensures you see every available option.