Reverse mortgage questions, answered

A loan secured by your home for owners 55 and older, with no required payments. Interest is added to the balance, and the loan is repaid when the home is sold, the last borrower moves out or dies. HomeEquity Bank, EQ Bank (Equitable Bank), Bloom and Home Trust (through brokers) offer them.

Up to 55% of the appraised value (59% for some products when the youngest owner is 70+). The amount rises with age: our estimate is about 36% at 65 and 47% at 75 for a city house.

HomeEquity Bank's CHIP 5-year special rate is 6.49% (as of October 29, 2026), and its posted 5-year rate, used at renewal, is 7.09%. EQ Bank's Flex Lite 5-year fixed is 6.23% and Bloom's 5-year fixed 6.33% (read November 1, 2026). That's about 1.9 points above the Bank of Canada's 4.58% average for new uninsured 5-year-plus mortgages (2026-08).

It becomes due. HomeEquity Bank gives the estate 180 days to repay, Bloom gives heirs 6 months. The home is usually sold; your heirs keep whatever is left after the loan, and lenders' no-negative-equity terms mean they don't owe more than the home's value.

A HELOC costs less interest but requires monthly payments and income to qualify, and the bank can lower the limit. A reverse mortgage needs no payments and can't be called while you keep the terms, but costs more and the balance grows. Our comparison engine shows both for your numbers.

You keep title and can live in the home as long as you meet the loan terms: keep paying property tax and home insurance, keep the home in reasonable repair and live in it as your principal residence. Missing those can put the loan in default, as with any mortgage.

You don't have to, but lenders allow some prepayment. HomeEquity Bank and Equitable Bank both describe limited yearly prepayments without a charge; above that, prepayment charges can apply in the early years. Check the current terms on the lender guide.

No. The money is a loan, not income, so it isn't taxable and isn't counted as income for OAS or GIS. Income you later earn by investing the money can be.

Lenders require every owner on title to be at least 55 and to be a borrower. A spouse who isn't on title and isn't a borrower may have to move when the loan becomes due. Ask your lawyer before signing.

Yes. HomeEquity Bank and Equitable Bank are federally regulated banks, supervised by OSFI, and their consumer obligations are overseen by the Financial Consumer Agency of Canada.