Lenders
Fraction — No-Payment and Interest-Only Mortgages
Fraction is not a reverse mortgage. It publishes interest-only, jumbo, and no-payment mortgages for licensed brokers in BC, Alberta, and Ontario. Listed here because the no-payment product solves a similar problem: equity access without monthly payments.
Rates last updated: September 2026
Min Age
18+
Provinces
ON, BC, AB
Rate Model
Published starting rates
Term
12 mo–5 yr
What Is Fraction?
Fraction is a Canadian lender founded in 2021. It is not a reverse mortgage. As of August 31, 2026, Fraction's live rate sheet lists interest-only, jumbo, and no-payment mortgages for licensed brokers in British Columbia, Alberta, and Ontario. The no-payment product is listed here because it solves a similar problem: equity access without monthly payments.
The key differences from a reverse mortgage are:
- Broker-only: Fraction prices and accepts deals through licensed Canadian brokers. Reverse mortgages from CHIP and Bloom can be applied for directly.
- Credit score: Fraction publishes a minimum Beacon of 660. Regulated reverse mortgage lenders do not use a Beacon cutoff as a primary qualifier.
- Mandatory term end: Interest Only and Jumbo are 12- or 18-month terms. No Payment is 2, 3, or 5 years. At term end, the full balance is due — you must sell, refinance, or renew. Reverse mortgages have no mandatory end date as long as you live in the home.
- Published starting rates: Interest Only is priced off 12-month CORRA plus a spread (from 5.10% on the August 31, 2026 sheet). No Payment starts from 5.75%. These are snapshots, not a live quote.
- No no-negative-equity guarantee: If your home loses enough value, you could owe more than it is worth. All regulated Canadian reverse mortgage lenders guarantee this cannot happen.
Rates and Products
| Product | Published starting rate | Max LTV | Note |
|---|---|---|---|
| Fraction Interest Only | from 5.10% | Up to 65% | 12- or 18-month terms; 1% lender fee; priced off 12-month CORRA plus spread |
| Fraction Jumbo | from 5.60% | Up to 65% | 12- or 18-month terms; 1% lender fee; jumbo pricing from 5.60% |
| Fraction No Payment | from 5.75% | Up to 55.9% at funding | 2-, 3-, or 5-year terms; 2% lender fee; closest reverse-mortgage analogue |
Lender fees: 1% on Interest Only and Jumbo; 2% on No Payment, per Fraction's August 31, 2026 rate sheet. Legal, appraisal, and closing costs are extra. On a $400,000 Interest Only loan at 1%, the lender fee is $4,000 — higher than the flat $995 charged by Equitable Bank and Home Trust.
Maximum loan size: $5,000,000. Minimum Beacon 660. Lending area: British Columbia, Alberta, and Ontario.
Mandatory Repayment at Term End
This is the most important feature distinguishing Fraction from a reverse mortgage: the full balance is mandatory at the end of the term. Interest Only and Jumbo terms are 12 or 18 months; No Payment terms are 2, 3, or 5 years.
At term end, you have three options:
- Sell the home and repay from proceeds
- Refinance with another lender (subject to qualification at that time)
- Renew with Fraction if they offer a renewal product — not guaranteed
This creates what financial planners call"refinance risk" or"rollover risk." If your financial situation has changed, if you cannot qualify for refinancing, or if Fraction does not offer renewal on favourable terms, you could be forced to sell your home at term end — the exact outcome most reverse mortgage borrowers are trying to avoid.
Reverse mortgages have no such risk. With CHIP, Equitable Bank, Bloom Finance, or Home Trust, you cannot be required to repay the loan as long as you live in the home, maintain the property, pay property taxes, and keep insurance current.
Fraction vs Reverse Mortgage — Side-by-Side
| Feature | Fraction | Reverse Mortgage (CHIP/EQ/Bloom/HT) |
|---|---|---|
| Minimum age | 18+ | 55+ |
| Monthly payments required | No Payment: no; Interest Only: yes | No |
| Mandatory term end | Yes — 12 months to 5 years | No — stays until you sell/move/die |
| Rate model | Published starting rates (CORRA-based on Interest Only) | Fixed or variable (conventional) |
| No-negative-equity guarantee | No | Yes (all 4 regulated lenders) |
| Interest compounding | See current rate sheet | Semi-annual (per Interest Act) |
| Prepayment penalty | Confirm on rate sheet | Varies by lender and product |
| Setup cost | 1% or 2% lender fee + legal + appraisal | $995–$2,995 flat |
| Federally regulated / CDIC | No | Yes (CHIP, Equitable, Home Trust) |
| Max loan size | $5.0M | Up to $800K (Equitable); no cap (CHIP) |
| Refinance risk at end | Yes — must repay or sell | No |
Who Is Fraction Best For?
Fraction is a legitimate product for a specific, narrow profile:
- Homeowners who want a no-payment or interest-only mortgage in BC, Alberta, or Ontario through a licensed broker
- Borrowers with a clear exit strategy at term end — selling, refinancing, or renewing within 12 months to 5 years
- Borrowers under 55 who cannot qualify for a reverse mortgage and need a no-payment structure
Fraction is not appropriate for borrowers who:
- Plan to stay in their home long-term (the mandatory term end creates risk)
- Are aged 55+ and prefer the certainty and consumer protections of a regulated reverse mortgage
- Cannot tolerate the scenario of being required to sell or refinance at term end
- Want a no-negative-equity guarantee
If you are 55 or older and considering your options, use our free calculator to estimate how much you could access through a regulated reverse mortgage instead. Learn how reverse mortgages work to understand the key differences. Reverse mortgage proceeds are tax-free and do not affect OAS, GIS, or CPP — an advantage Fraction does not replicate. For the impact on what your heirs inherit, see the inheritance impact guide.
How Fraction Compares to Reverse Mortgages
For eligible borrowers (55+) in Ontario, BC, or Alberta, the four regulated reverse mortgage lenders — CHIP, Equitable Bank, Bloom Finance, and Home Trust — offer substantially better consumer protections: no mandatory term end, no-negative-equity guarantee, federally regulated oversight, and semi-annual compounding under the Interest Act.
Fraction's advantage is access for borrowers who cannot use a reverse mortgage (including under 55) and a no-payment product with published starting rates from 5.75%. For long-term retirement planning at age 55+, a regulated reverse mortgage is almost always the more appropriate product.
See our full side-by-side comparison, alternatives guide, or take the lender quiz to find your best match.