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 five Canadian lenders — CHIP, Equitable Bank, Bloom, Home Trust, and Fraction — require that any existing mortgages or secured debts be paid off from the reverse mortgage proceeds.

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. Rates are higher than conventional mortgages because reverse mortgages carry more risk for lenders. See our lender comparison for the latest rates.

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. Learn more about inheritance impact.

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. Read our detailed tax and benefits guide for worked examples.

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. See our complete tax guide for details.

Setup costs vary by lender: CHIP charges $1,795–$2,995, Equitable Bank charges $995, and Bloom charges approximately $2,300. 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. There are no ongoing monthly fees. Use our cost estimator to calculate your total costs.

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. Read our full ILA guide for details.

It depends on your situation. Equitable Bank (Flex) offers the lowest rates and fees but is only available in BC, AB, ON, and QC and is broker-exclusive. CHIP (HomeEquity Bank) is available in all 10 provinces and offers the most product flexibility including income-stream advances and a short-term bridge option. Bloom Finance offers Canada's only lifetime fixed rate and a Prepaid Mastercard for on-demand equity access. Take our lender quiz to find your match, or see the full comparison.

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. See our step-by-step application guide for the full process.

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 only and is limited to urban properties. Bloom is available 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 option. See our province guide for detailed availability by location.

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. See our full alternatives comparison for a detailed side-by-side analysis, or use our HELOC comparison calculator.

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. See our detailed alternatives guide for a full comparison of each option.

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 amortization calculator 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 five 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 five 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.