Reverse Mortgages
Canadians aged 55+ are living longer and want to stay in the homes they love, but they need the financial peace of mind to do it – which is why the reverse mortgage continues to gain popularity.
If you’re looking to improve cash flow, pay off an existing mortgage, clear balances on existing credit cards and loans, make home improvements, or gift a down payment to a loved one, a reverse mortgage might be the right solution for you.
What is a reverse mortgage?
A reverse mortgage is a simple way to turn a portion of your hard-earned home equity into tax-free cash – with no ongoing payments required.
- Borrow up to 59% of your home’s value
- No monthly mortgage payments required
- Receive your tax-free funds as a lump sum or over time Retain ownership of the home you love
A reverse mortgage turns your home equity into cash that can be used any way you like.
Are you eligible for a reverse mortgage?
To be eligible, you must be:
- A homeowner
- Aged 55+
- Live in your home for at least 6 months of the year
If there are other individuals listed on your home’s title, they must be at least 55 years old.
Reasons to consider a reverse mortgage
If you’d like to boost your retirement income, a reverse mortgage allows you to access up to 59% of your home’s equity in tax-free cash. You can take your reverse mortgage cash as either a one-time lump sum payment, as monthly payouts, or as ad-hoc advances when you need them. Some of the more popular reasons for taking on a reverse mortgage include:
- Paying off existing debts like a traditional mortgage Gifting money to family
- Improving your quality of life
- Adding safety features to or renovating your home Buying an investment or vacation property
- Paying for health care or in-home care
- Remember, you can also pay off your existing traditional mortgage to eliminate payments and increase cash flow – the options are endless!
Benefits of a reverse mortgage
The benefits of a reverse mortgage don’t just stop at the ability to cash in on your home’s equity! In fact, these benefits also include:
- Title and ownership of property remain in homeowner’s name
- No monthly mortgage payments required
- Prepayment penalties waived in the event of death or care home placement
Where to get a reverse mortgage in Canada
There are two Canadian Schedule I banks that offer reverse mortgages. Both banks’ reverse mortgage products are similar in their design and function.
The two lenders in Canada offer reverse mortgages with distinct fees, rates, and prepayment charges. Contact your favourite Mortgage Broker to learn more!
Candace Perko, Mortgage Broker
