Frequently Asked Questions

What Is A Reverse Mortgage Exactly?
Designed for Canadians 55 and over, reverse mortgages in Canada are designed to allow you to access the built up equity in your house (up to 55% of the home value) without having to make payments on the principal or interest. It’s a great way for those entering or in retirement to enjoy consistent income all without having to worry about repaying the loan until they are ready to move or sell their home.
What’s the difference between this and a Home Equity Line of Credit?
There are a number of key differences. The first is that a Reverse Mortgage doesn’t require you to provide your credit score or income. Second, you don’t have to make any payments on the Reverse Mortgage until you sell or move, whereas a HELOC will require regular monthly payments. Find out more about the difference here.
Will I have any equity left in my home?
The good news is that, on average, homeowners have well over 50% of the value of their home left after repaying their loan. 99% of them have money left over. And this money is yours of course. There are a number of things to consider to know for sure how much equity you would have left, however, such as the amount of your loan, value of your home, and the amount of time that has passed since you took out the loan.
Will I ever have to sell my house to repay the loan?
No. You will never be required to sell your home on account of this mortgage. You maintain control and ownership over your home. Only when you decide to sell would you ever have to repay the loan.
What happens if my spouse passes away before the loan is repaid?
The surviving spouse is under no obligations to make a repayment on the loan or sell the house. Only if you are the sole borrower and you pass away would your estate be required to repay your loan after they sell your home. However, if you are married then your spouse would also need to qualify. This is for their protection as it is is something that gave reverse mortgages a bad reputation in other countries.
What are the interest rates?
Interest rates mirror the rates charged on other home equity loans. They are usually somewhat higher than the rates charged for a Home Equity Line of Credit because you are not required to make monthly payments or repay the loan until you move or sell your home.
Who offers this mortgage product in Canada?
In Canada, Reverse Mortgages are offered directly to the public by HomEquity Bank.