Reverse Mortgage FAQ Canada — Common Questions Answered | Reverse Mortgage Rachel

Question 1

What is a reverse mortgage?

Accepted Answer

A reverse mortgage is a loan secured against the equity in your home. Unlike a traditional mortgage, you don't make monthly payments. Instead, the loan — plus interest — is repaid when you sell your home, move out, or pass away. You retain full ownership of your home throughout.

Question 2

Who is eligible for a reverse mortgage in Canada?

Accepted Answer

To qualify, all homeowners on title must be at least 55 years old, the home must be your primary residence in Canada, and you must have sufficient equity in your home. Most property types qualify, including single-family homes, condos, and townhomes.

Question 3

How much can I borrow?

Accepted Answer

You can access up to 55% of your home's appraised value. The exact amount depends on your age, your home's location and type, and current interest rates. Generally, the older you are and the more your home is worth, the more you can access.

Question 4

How do I receive the money?

Accepted Answer

You can choose to receive your funds as a lump sum, as regular monthly or quarterly payments, as a planned advance (a set amount at specific times), or as a combination of these options. We'll find the approach that works best for your situation.

Question 5

Will I still own my home?

Accepted Answer

Yes — absolutely. You retain full ownership of your home for as long as you live there. A reverse mortgage is simply a loan secured against your home's equity. The title stays in your name.

Question 6

Can I be forced to leave my home?

Accepted Answer

No. As long as you maintain the property, keep up with property taxes and insurance, and continue to live in the home as your primary residence, you cannot be forced to leave.

Question 7

What happens when I sell or pass away?

Accepted Answer

When you sell your home, move out permanently, or pass away, the reverse mortgage is repaid from the proceeds of the home sale. Any remaining equity — after the loan and interest are repaid — goes to you or your estate.

Question 8

Will there be anything left for my children?

Accepted Answer

In most cases, yes. Canadian home values have historically appreciated over time, and the majority of clients leave significant equity to their estate. We'll walk through projections together so you and your family can see the full picture.

Question 9

Is the money I receive taxable?

Accepted Answer

No. Reverse mortgage funds are not considered taxable income by the Canada Revenue Agency. They won't affect your Old Age Security (OAS), Guaranteed Income Supplement (GIS), or other government benefits.

Question 10

Do I need to make monthly payments?

Accepted Answer

No monthly payments are required. The loan balance — principal plus accrued interest — is repaid in full when the home is sold or the loan otherwise becomes due. You can choose to make voluntary interest payments if you wish, but it's never required.

Question 11

What are the costs involved?

Accepted Answer

There are some upfront costs: a home appraisal fee, independent legal advice (required to protect you), and closing costs. These are typically deducted from your loan proceeds so there's nothing to pay out of pocket. I'll walk you through every cost clearly before you commit.

Question 12

What interest rate will I pay?

Accepted Answer

Reverse mortgage interest rates are typically slightly higher than traditional mortgage rates, reflecting the no-payment structure. Rates can be fixed or variable. I'll present your options clearly and explain the long-term implications of each.

Question 13

How long does the process take?

Accepted Answer

From your first consultation to funds in hand, most clients complete the process in 4–8 weeks. The main variable is the home appraisal timeline. I'll keep you informed at every step.

Question 14

Do I need good credit or income to qualify?

Accepted Answer

No. Unlike a traditional mortgage, a reverse mortgage doesn't require income verification or a minimum credit score. Eligibility is based primarily on your age, your home's value, and your equity.

Question 15

Should I involve my family?

Accepted Answer

I always encourage it. A reverse mortgage is a significant financial decision and having your adult children or a trusted advisor in the conversation can give everyone peace of mind. I'm happy to meet with your family together.

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